Fidelity KiwiSaver Scheme - Fidelity Life Assurance · PDF file2 The Fidelity KiwiSaver Scheme at a glance The Fidelity KiwiSaver Scheme at a glance What is KiwiSaver? KiwiSaver is

Fidelity KiwiSaver Scheme

Investment Statement

and application form

prepared as at 31 March 2014

1

Investment decisions are very important. They often have long-term consequences. Read all documents carefully. Ask questions. Seek advice before committing yourself.

Choosing an investment

When deciding whether to invest, consider carefully the answers to the

following questions that can be found on the pages noted below:

Page

1. What sort of investment is this? 9

2. Who is involved in providing it for me? 11

3. How much do I pay? 13

4. What are the charges? 17

5. What returns will I get? 19

6. What are my risks? 26

7. Can the investment be altered? 29

8. How do I cash in my investment? 31

9. Who do I contact with inquiries about my investment? 31

10. Is there anyone to whom I can complain if I have problems with the investment? 32

11. What other information can I obtain about this investment? 32

In addition to the information in this document, important information

can be found in the current registered prospectus for the investment.

You are entitled to a copy of that prospectus on request.

The Financial Markets Authority regulates conduct in financial markets

The Financial Markets Authority regulates conduct in New Zealand’s

financial markets. The Financial Markets Authority’s main objective

is to promote and facilitate the development of fair, efficient, and

transparent financial markets.

For more information about investing, go to http://www.fma.govt.nz

Important information(The information in this section is required under the Securities Act 1978)

Financial advisers can help you make investment decisions

Using a financial adviser cannot prevent you from losing money, but it

should be able to help you make better investment decisions.

Financial advisers are regulated by the Financial Markets Authority

to varying levels, depending on the type of adviser and the nature of

the services they provide. Some financial advisers are only allowed to

provide advice on a limited range of products.

When seeking or receiving financial advice, you should check —

the type of adviser you are dealing with:

the services the adviser can provide you with:

the products the adviser can advise you on.

A financial adviser who provides you with personalised financial adviser

services may be required to give you a disclosure statement covering

these and other matters. You should ask your adviser about how he or

she is paid and any conflicts of interest he or she may have.

Financial advisers must have a complaints process in place and they, or

the financial services provider they work for, must belong to a dispute

resolution scheme if they provide services to retail clients. So if there

is a dispute over an investment, you can ask someone independent to

resolve it.

Most financial advisers, or the financial services provider they work for,

must also be registered on the financial service providers register. You

can search for information about registered financial service providers

at http://www.fspr.govt.nz

You can also complain to the Financial Markets Authority if you have

concerns about the behaviour of a financial adviser.

This is an Investment Statement for the purposes of the Securities

Act 1978.

2 The Fidelity KiwiSaver Scheme at a glance

The Fidelity KiwiSaver Scheme at a glance

What is KiwiSaver?

KiwiSaver is a work-based savings scheme which is voluntary to join,

but compulsory for employers to facilitate. The Government created

KiwiSaver to help New Zealanders financially prepare for retirement.

To be eligible to join KiwiSaver, you must be:

a New Zealand citizen, or entitled to permanent residence in

this country;

living or normally living in New Zealand (except in limited

circumstances); and

under the age of eligibility for New Zealand Superannuation

(currently 65).

KiwiSaver is an easy way to save, with your choice of contributions

being deducted directly from your gross salary or wages at a rate of 3%,

4% or 8%.

If you are starting a new job and have not already joined KiwiSaver,

you will be automatically enrolled in KiwiSaver. You have eight weeks

from starting your new job to decide if you want to remain a member of

KiwiSaver or to opt out.

You are also entitled to an employer contribution of 3% of your gross

salary or wages, provided you contribute the minimum of 3% of your

gross salary or wages. This will be paid to your KiwiSaver scheme

account on your behalf.

If you are self-employed or not employed, you can still join KiwiSaver by

approaching a KiwiSaver provider directly.

Other than in certain specified circumstances, your savings in KiwiSaver

will be locked in until you reach the qualifying age for New Zealand

Superannuation (currently age 65) or after five years membership,

whichever is later. For more information on accessing your funds, see

under the heading “How do I cash in my investment?” on page 31.

Key terms

The Fidelity KiwiSaver Scheme is made up of nine different

Investment Funds.

As manager of the Fidelity KiwiSaver Scheme, Grosvenor Investment

Management Limited uses its own in-house investment specialists,

together with a number of domestic and international external fund

managers, to manage your investments in each of the Investment Funds.

3

Which Investment Funds you choose will depend on your financial

situation and risk appetite. Grosvenor has established strong

relationships with financial advisers located throughout New Zealand,

who will be able to help you choose the right Investment Funds for you.

Each Investment Fund invests in a diversified range of securities, traded

on recognised exchange markets. These securities are valued every day

in order to calculate the unit price of each Investment Fund.

How the value of your investment and your returns is determined is

described in more detail in the section “What returns will I get?” on

pages 19-25.

Fees and charges

The fees and charges you will pay for investing in the Fidelity KiwiSaver

Scheme, either directly or indirectly, are as follows:

Member fee – $3.03 per month.

Administration fees – these differ between the Investment Funds

and are a percentage of the value of the assets in the Investment

Funds.

External investment management fees – these differ between the

Investment Funds and are a percentage of the value of the assets

in the Investment Funds.

Performance fee – performance fees may be paid to external fund

managers.

Trustee fee – up to 0.065% p.a. of the value of the assets in the

Investment Fund.

Switching fee – you can switch Investment Funds once a calendar

month without charge. Second and subsequent switches cost $60

per switch.

Foreign exchange facilitation fee – up to 0.50% of the net amount

of any foreign exchange transactions undertaken by an Investment

Fund (this fee will only be charged from 1 July 2014).

Expenses – the Manager and/or the Trustee are entitled to be

reimbursed out of the Scheme for all costs, charges and expenses

incurred in the administration and management of the Scheme.

The fees and charges you will pay for investing in the Fidelity KiwiSaver

Scheme are described in more detail in the section “What are the

charges?” on pages 17-18.

Risks

All investments involve some form of risk. The principal risks of

investing in the Fidelity KiwiSaver Scheme are explained in more

detail in the section “What are my risks?” on pages 26-29 and can

be summarised as:

Inappropriate fund risk – the risk that you have invested in

Investment Funds which are not appropriate for your financial

situation and risk appetite.

Investment market risk – the risk that the Investment Funds that you

have invested in do not perform as you expect because investment

markets do not perform well.

Manager risk – the risk that the Investment Funds that you have

invested in do not perform as you expect because of the way the

Manager invests your money and manages the risk.

Regulatory risk – the risk that changes to the law governing or

otherwise affecting the Investment Funds that you have invested in

impact on the value of your savings.

Tax risk – the risk that you have not paid the correct amount of tax.

Who is involved in providing the Fidelity KiwiSaver Scheme?

The following parties are involved in providing the Fidelity KiwiSaver

Scheme:

Manager and issuer – Grosvenor Investment Management Limited,

a wholly-owned subsidiary of Grosvenor Financial Services Group

Limited; the company that administers the Fidelity KiwiSaver

Scheme, and that selects and manages its investments.

Promoter – Grosvenor Financial Services Group Limited.

Fund managers – Grosvenor uses its own in-house investment

specialists, together with a number of domestic and international

external fund managers, to select and manage the Fidelity KiwiSaver

Scheme’s investments.

Trustee – Public Trust; the entity that supervises how the Manager

manages the Fidelity KiwiSaver Scheme.

Possible merger with the Grosvenor KiwiSaver Scheme

The Manager is also the manager of the Grosvenor KiwiSaver Scheme.

The Manager intends to explore the possibility of merging the Grosvenor

KiwiSaver Scheme and the Fidelity KiwiSaver Scheme by the transfer

of members from one of those schemes to the other, subject to

appropriate regulatory approvals and other necessary steps to achieve

this. No time frame has been set for undertaking such a merger.

4

1 Very low Less than 0.5

2 Low 0.5 to less than 1

3 Low to medium 1 to less than 2

4 Medium 2 to less than 3

5 Medium to high 3 to less than 4

6 High 4 to less than 6

7 Very high 6 or greater

Risk band Risk level Estimated number of negative annual returns over any 20 year period

Standard risk measure

In order to help you better understand the risk and potential losses

associated with each Investment Fund, the Manager has adopted

the standard risk measure.

The standard risk measure is based on Australian superannuation

industry guidance and allows you to compare investment options

that are expected to deliver a similar number of negative annual

returns over any 20 year period.

The standard risk measure is not a complete assessment of all

forms of investment risk, for instance it does not detail what the size

of a negative return could be or the potential for a positive return to

be less than you may require to meet your objectives. Further, it does

not take into account the impact of fees and tax on the likelihood

of a negative return.

The Fidelity KiwiSaver Scheme at a glance (continued)

5

1 For details of the guarantees provided by Fidelity Life to the Trustee in respect of the Unit Price of Units in the Capital Guaranteed Kiwi Fund as at 31 March 2014 and 31 March 2015 (and the Manager’s intentions with regard to a replacement guarantee as at 31 March in each subsequent year), see pages 19-21.

What Investment options are available?

The Fidelity KiwiSaver Scheme has nine Investment Funds, each with

a different risk profile

Capital Guaranteed Kiwi Fund

Conservative Kiwi Fund

Asset Class Conservative Kiwi Fund

Balanced Kiwi Fund

Ethical Kiwi Fund

Growth Kiwi Fund

Asset Class Growth Kiwi Fund

Aggressive Kiwi Fund

Options Kiwi Fund

Ethical Kiwi Fund

The Ethical Kiwi Fund is a diversified fund, with investments

in fixed interest securities in addition to New Zealand,

Australian and overseas shares. It aims to provide investors

with the opportunity to avoid certain types of companies and

investments and thus supports investments that embrace

the principles of ethical business practice. Currently,

the Ethical Kiwi Fund uses its best endeavours to avoid

securities issued by organisations earning a substantial

share of their earnings from the following industries:

tobacco alcohol gambling armament production

Options Kiwi Fund

The Options Kiwi Fund is an alternative investment that

invests primarily in funds that invest in cash deposits, bills

and other short-term financial instruments which is used as

security by Tyndall to sell option contracts to various major

banks. It is managed for the Fidelity KiwiSaver Scheme

primarily by Tyndall Investment Management Limited

(Tyndall), but may include some directly-held short term

fixed interest securities as part of the Manager’s active risk

management process.

Much like a property investor can use their own house

as security to buy more houses, the cash invested in the

Tyndall fund is used as security by Tyndall to sell option

contracts to various major banks. Tyndall earns a premium

for selling these options contracts.

These options contracts are based on movements in

Government bond rates. Currently most of these are over

a 30-day period on United States Government 10 year

bonds (but they can be over other time periods and on

other countries’ Government bonds). They provide the bank

counterparty with a pay out if interest rates move by more

than a prescribed margin in that time.

If the 10 year Government bond rate moves up or down

less than the margin, the fund does not have to make

any payment on maturity of the option.

If the 10 year Government bond rate moves more than

the margin, then the fund must pay out on the contract.

The Options Kiwi Fund’s return (positive or negative)

is a combination of the options premiums paid to the

Options Kiwi Fund by the banks less any payout; plus

any interest earned on the short-term cash deposits (this

could be zero).

Authorised Governments’ Bonds: New Zealand, Australia,

Eurozone, United Kingdom and United States

Bonds: 7 years to 15 years duration

The Options Kiwi Fund is a high risk fund and is subject

to significant volatility in short term returns. Losses can

occur quickly. You should seek advice from an Authorised

Financial Adviser regarding whether the Options Kiwi Fund

is appropriate for you and, if so, what proportion of your

investment should be in the Options Kiwi Fund.

You may also choose the Life Phases investment option (Life Phases)

which automatically allocates your contributions and accumulated

balances to Investment Funds based on your age. Please refer to pages

9-10 for further details.

Capital Guaranteed Kiwi Fund1

For investors who are seeking some degree of stability in the

value of their investment, the Capital Guaranteed Kiwi Fund

has the benefit of guarantees from Fidelity Life Assurance

Company Limited (Fidelity Life) that the Unit Price calculated

as of 31 March 2014 will not be less than the Unit Price

calculated as of 31 March 2013 and that the Unit Price

calculated as of 31 March 2015 will not be less than the Unit

Price calculated as of 31 March 2014.

Investment options

6 Investment funds

Capital Guaranteed Kiwi Fund (see note 2)Where it investsA mix of cash, fixed interest, New Zealand, Australian and international shares, with at least 40% invested in cashWho it may suitInvestors with a shorter-term time frame (up to seven years), seeking a high degree of capital stability in their investmentRisk levelVery low

Conservative Kiwi FundWhere it investsA mix of cash, fixed interest, property and New Zealand, Australian and international shares, with at least 65% invested in cash and fixed interestWho it may suitInvestors with a 5-10 year time frame, seeking capital stability with some investment growthRisk levelLow

Asset Class Conservative Kiwi FundWhere it investsA mix of cash, fixed interest, property and New Zealand, Australian and international shares, with a maximum of 30% exposure to New Zealand, Australian and international sharesWho it may suitInvestors with a 5-10 year time frame seeking capital stability with some investment growthRisk levelLow

Balanced Kiwi FundWhere it investsA balanced mix of cash, fixed interest, property and New Zealand, Australian and international sharesWho it may suitInvestors with a 5-15 year time frame looking for a diversified portfolio balancing risk and return, but willing to accept some short term periods of negative returnsRisk profileMedium

Ethical Kiwi FundWhere it investsA mix of fixed interest, New Zealand, Australian and international shares selected in accordance with ethical investment guidelines Who it may suitInvestors with a 5-15 year time frame wishing to invest in socially responsible investments, looking for a portfolio balancing risk and return, but willing to accept some periods of negative returnsRisk levelMedium

WHERE THE INVESTMENT FUNDS INVEST (target benchmark – see note 1)

Cash 60%

Cash 25%

Cash 15%

Cash 5%

Fixed interest 25%

Property 5%

Property 7.5%

Property 10%

Fixed interest 50%

Fixed interest 35%

Fixed interest 40%

Fixed interest 17.5%

New Zealand and Australian shares 5%


New Zealand and Australian

shares 12.5%



International shares 10%




International shares 52.5%

Options, cash & fixed interest 25%

Growth assets 75%*

Cash 5%International shares 40% Fixed Interest 10%

Property 5%


Cash 5%International shares 12.5%

Fixed Interest 65%

Property 5%

New Zealand and Australian shares 12.5%

Cash 60%

Cash 25%

Cash 15%

Cash 5%

Fixed interest 25%

Property 5%

Property 7.5%

Property 10%

Fixed interest 50%

Fixed interest 35%

Fixed interest 40%





shares 12.5%









Growth assets 75%*


Property 5%



Fixed Interest 65%

Property 5%


Cash 60%

Cash 25%

Cash 15%

Cash 5%

Fixed interest 25%

Property 5%

Property 7.5%

Property 10%

Fixed interest 50%

Fixed interest 35%

Fixed interest 40%





shares 12.5%









Growth assets 75%*


Property 5%



Fixed Interest 65%

Property 5%


Cash 60%

Cash 25%

Cash 15%

Cash 5%

Fixed interest 25%

Property 5%

Property 7.5%

Property 10%

Fixed interest 50%

Fixed interest 35%

Fixed interest 40%





shares 12.5%









Growth assets 75%*


Property 5%



Fixed Interest 65%

Property 5%


Cash 60%

Cash 25%

Cash 15%

Cash 5%

Fixed interest 25%

Property 5%

Property 7.5%

Property 10%

Fixed interest 50%

Fixed interest 35%

Fixed interest 40%





shares 12.5%









Growth assets 75%*


Property 5%



Fixed Interest 65%

Property 5%


7

NOTES: 1. The actual holdings of each Investment Fund will vary around the benchmark – refer to the table showing the asset allocation ranges under the heading “What sort of investment is this?” 2. For details of the guarantees provided by Fidelity Life to the Trustee in respect of the Unit Price of Units in the Capital Guaranteed Kiwi Fund as at 31 March 2014 and 31 March 2015 (and the Manager’s intentions with regard to a replacement guarantee as at 31 March in each subsequent year) see pages 19-21. 3. The Aggressive Kiwi Fund is a high risk fund and is subject to significant volatility. The Aggressive Kiwi Fund invests in funds which use gearing and derivatives (options contracts) that could enhance any returns or increase losses. The Aggressive Kiwi Fund has a substantial holding in shares, which are susceptible to the risk that their value will fall due to either a general market fall or stock specific factors. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Aggressive Kiwi Fund is appropriate for you and, if so, what proportion of your investment should be in the Aggressive Kiwi Fund. 4. The Options Kiwi Fund is a high risk fund and is subject to significant volatility in short term returns. The Options Kiwi Fund invests in funds which use gearing and derivatives (options contracts) that could enhance any returns or generate substantial losses by those funds, and therefore by the Options Kiwi Fund. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Options Kiwi Fund is appropriate for you and, if so, what proportion of your investment should be in the Options Kiwi Fund.

Growth Kiwi FundWhere it investsA mix of cash, fixed interest, property and New Zealand, Australian and international shares, with at least 50% of assets invested in growth investments, particularly international sharesWho it may suitInvestors with a longer-term time frame (10-45 years) looking for growth and able to tolerate a larger risk of negative annual return periodsRisk levelMedium to high

Asset Class Growth Kiwi FundWhere it investsA mix of cash, fixed interest, property and New Zealand, Australian and international shares, with at least 75% of assets invested in growth investments, which are: New Zealand, Australian and international shares; and propertyWho it may suitInvestors with a longer-term time frame (10-45 years) looking for growth and able to tolerate a larger risk of negative annual return periodsRisk levelMedium to high

Aggressive Kiwi Fund (see note 3)Where it investsInternational shares, New Zealand and Australian shares, derivatives, fixed interest and cashWho it may suitInvestors looking for performance over the long-term (10-45 years) and who can tolerate a high level of volatility (significant ups and downs in the short term value of their investment) associated with investing into such investmentsRisk levelHigh

Options Kiwi Fund (see note 4)Where it investsShort-term fixed interest investments, used as security for issuing derivatives (selling put and call options contracts)Who it may suitInvestors with a 7-15 year time frame who are looking to earn above average returns, but who are willing to accept the significant short term market volatility and losses that may occur from the strategy of issuing options on United States Government and other countries bondsRisk levelVery high

Cash 60%

Cash 25%

Cash 15%

Cash 5%

Fixed interest 25%

Property 5%

Property 7.5%

Property 10%

Fixed interest 50%

Fixed interest 35%

Fixed interest 40%





shares 12.5%









Growth assets 75%*


Property 5%



Fixed Interest 65%

Property 5%


Cash 60%

Cash 25%

Cash 15%

Cash 5%

Fixed interest 25%

Property 5%

Property 7.5%

Property 10%

Fixed interest 50%

Fixed interest 35%

Fixed interest 40%





shares 12.5%









Growth assets 75%*


Property 5%



Fixed Interest 65%

Property 5%


Cash

Options contracts

Fixed interest

Cash 60%

Cash 25%

Cash 15%

Cash 5%

Fixed interest 25%

Property 5%

Property 7.5%

Property 10%

Fixed interest 50%

Fixed interest 35%

Fixed interest 40%





shares 12.5%









Growth assets 75%*


Property 5%



Fixed Interest 65%

Property 5%


* Growth assets are assets where capital growth appreciation is expected such as shares and property.

WHERE THE INVESTMENT FUNDS INVEST (target benchmark – see note 1)

8 Joining the Fidelity KiwiSaver Scheme

To join, you will need to: read this Investment Statement

complete the application form attached to this Investment Statement

provide proof of identity (see the application form for more detail)

If you are employed, you must contribute via salary deduction.

If you are not employed and are contributing directly, you will also need to:

complete the direct debit form

provide a deposit slip from your bank account so we can verify the account details.

If you are making any payments by cheque, please make your cheque payable to “Public Trust (Grosvenor) Nominees Limited”.

If you are enrolling a child: who is under 16, all of the child’s parents/guardians (acting jointly)

must sign the application form

who is aged 16 or 17, the child must co-sign the application form with a parent/guardian

Return the application form (and other documents as required) to your financial adviser or the Manager

Investor identificationThe Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires Grosvenor to verify the identity of all investors. When you apply to join the Scheme, you will be asked to provide Grosvenor with certain information about you.

Important information

By becoming a member of the Fidelity KiwiSaver Scheme in accordance with the KiwiSaver Act 2006 you agree to be bound by the

provisions of the Fidelity KiwiSaver Scheme’s Trust Deed. You also authorise the Manager and the Trustee to:

use information about you for statistical purposes as long as you are not identified, and for providing you with information about the

Manager and its services.

disclose information held about you by the Manager or any of its related companies, to the Trustee, Inland Revenue, to third parties

for processing on the Manager’s behalf, where required by law, or with your consent.

invest contributions received by the Scheme on your behalf in the Default Investment Fund (currently the Balanced Kiwi Fund), unless

you give the Manager an Investment Direction (including selecting Life Phases (see pages 9-10 for details)).

send emails to you should you provide the Manager with your email address, in respect of the Fidelity KiwiSaver Scheme and any

further services.

Any personal information held by the Manager or Trustee about you will be stored securely. You have the right to access and correct

personal information by contacting the Manager or the Trustee.

Where you have invested through a financial adviser, you authorise the Manager to disclose information about you to that financial

adviser or to any other financial adviser allocated to service your account.

KiwiSaver Member Account

Once you are enrolled in the Fidelity KiwiSaver Scheme, you will

be able to access your account via the website www.nzkiwisaver.co.nz

9Fidelity KiwiSaver Scheme – in detail

The securities offered in this Investment Statement are an interest in

the Fidelity KiwiSaver Scheme (Scheme), a registered KiwiSaver scheme

designed for long-term savings and which enables you and other

members to obtain the benefits of professional investment management.

Membership of the Scheme

To be eligible to join the Scheme you must be under the New Zealand

superannuation qualification age (currently 65) (unless you

transfer from another KiwiSaver scheme), entitled to permanently

reside in New Zealand and normally living in New Zealand (subject to

certain exceptions).

You can become a member of the Scheme in one of three ways:

By completing and returning the application form attached to this

Investment Statement, and having your application accepted by

the Manager.

If you are allocated to the Scheme under the KiwiSaver Act 2006

(KiwiSaver Act) because your employer has agreed with the

Manager that the Manager will provide access to the Scheme for the

employer’s new employees (Employer’s Chosen Scheme) and as

such you are subject to automatic enrolment, or you have given your

employer a KiwiSaver deduction notice and you have not chosen

your own KiwiSaver scheme within the required time frame.

If you are an employee of an employer that has entered into a

participation agreement with the Manager to provide access to the

Scheme to its employees (Participating Employer).

This Investment Statement is for individual members and employees

of employers who have selected the Scheme as its Employer’s

Chosen Scheme. A separate Investment Statement will be provided

for employees of Participating Employers, along with a supplement

setting out the terms and conditions of the Participating Employer’s

participation in the Scheme.

Crown contributions and other benefits

The Government will make certain contributions to a KiwiSaver scheme

of which you are a member. The current Government contributions are:

an initial and one-off kick start $1,000 contribution if this is the first

KiwiSaver scheme of which you are a member.

for the period 1 July to 30 June, for every dollar you contribute, you

will receive a member tax credit of fifty cents, up to the maximum

of $521.43 per annum for most members. This will be paid into

your account following receipt from Inland Revenue. In the year you

first join KiwiSaver, the tax credit will be prorated from the month

you joined.

1. What sort of investment is this?The Government will also pay a first home deposit subsidy of up to

$5,000 subject to eligibility requirements. Further details on this

subsidy are located under the heading entitled “First home benefit” on

page 23.

Currently if you join as an employee you will benefit from a minimum

compulsory contribution from your employer of 3% of your gross salary

or wages subject to certain exceptions.

Certain criteria and conditions apply to these Government and other

benefits. Not all members will qualify for all benefits. Contact the

Manager for further information.

Life Phases

Life Phases is an investment process that automatically allocates your

contributions and accumulated balance(s) to an Investment Fund(s)

based on your age. Life Phases aims to reduce your risk exposure over

time by changing where your investments are allocated and moving a

higher proportion of your savings into more conservative investments

as you approach retirement age. Life Phases recognises that retirement

savers can usually tolerate higher investment risk at a younger age with

the potential for greater returns over the long term. Life Phases also

recognises that retirement savers usually need lower investment risk as

they near retirement with more stable returns.

If you choose Life Phases as your Investment Direction, you will not have

to (nor can you) make a decision about which Investment Fund(s) you

should invest in. Your Investment Direction will be predetermined as

detailed in the table below. Life Phases will allocate new contributions

and switch your existing balance(s) (Life Phases Rebalancing) every

five years starting at 40 years of age and ending at 60 years of age. You

can opt out of Life Phases at any time by contacting the Manager and

providing a new Investment Direction.

Life Phases Rebalancing takes place as follows:

Up to 40 years 100% Growth Kiwi Fund

40 – 44 years50% Growth Kiwi Fund50% Balanced Kiwi Fund

45 – 49 years 100% Balanced Kiwi Fund

50 – 54 years50% Balanced Kiwi Fund50% Conservative Kiwi Fund

55 – 59 years 100% Conservative Kiwi Fund

60+ years50% Conservative Kiwi Fund50% Capital Guaranteed Kiwi Fund

Life Phases Rebalancing age Fidelity KiwiSaver Scheme Investment Fund allocation

10

If you are an existing member of the Fidelity KiwiSaver Scheme and you

select Life Phases, your current Investment Direction will be rebalanced

and existing balance(s) switched to the asset allocation that matches

your current age as per the above table. No switching fees will be

charged for any Life Phases Rebalancing. The Life Phases process will

begin on each Life Phases Rebalancing anniversary date (Rebalancing

Anniversary Date) i.e. the next business day following your relevant

birthday as in the table above. For members whose birthday is

29 February, the Rebalancing Anniversary Date will be 28 February if

29 February does not occur in that year. Once all pending transactions

are cleared and processed through your account, the Life Phases

Rebalancing will take place.

From time to time, the age ranges applying to Life Phases Rebalancing

age may be adjusted and Investment Fund allocation specific to

particular age bands may be added or deleted. Members who have

selected Life Phases will thereafter have their holdings rebalanced in

accordance with these changes at their next Rebalancing Anniversary

Date (as amended) or earlier at the Manager’s discretion. In the event

of a change in Life Phases Rebalancing age ranges or Investment Fund

allocation, the Manager will provide notice to all Members who have

selected Life Phases prior to the change(s) taking effect.

Life Phases may not be appropriate for all Members. Life Phases has

been designed for the typical saver committed to saving for retirement.

Your personal circumstances will change over time and these changes

could result in the Life Phases asset allocation not providing a level

of risk appropriate to your individual situation. If your personal

1 For details of the guarantees provided by Fidelity Life to the Trustee in respect of the Unit Price of the Units in the Capital Guaranteed Kiwi Fund as at 31 March 2014 and 31 March 2015 (and the Manager’s intentions with regard to a replacement guarantee as at 31 March in each subsequent year), see pages 19-21.

2 The Aggressive Kiwi Fund is a high risk fund and is subject to significant volatility. The Aggressive Kiwi Fund invests in funds which use some gearing and derivatives (options contracts) that could enhance any returns or increase losses. The Aggressive Kiwi Fund has a substantial holding in shares, which are susceptible to the risk that their value will fall due to either a general market fall or stock specific factors. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Aggressive Kiwi Fund is appropriate for you and, if so, what proportion of your investment should be in the Aggressive Kiwi Fund.

3 The Options Kiwi Fund is a high risk fund and is subject to significant volatility in short term returns. The Options Kiwi Fund invests in funds which use gearing and derivatives (options contracts) that could enhance any returns or generate substantial losses by those funds, and therefore by the Options Kiwi Fund. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Options Kiwi Fund is appropriate for you and, if so, what proportion of your investment should be in the Options Kiwi Fund.

Fixed Interest 30% – 85% 50% – 80% 0% – 85% 5% – 15% 0% – 70% 0% – 40% 35% – 45%

Cash 5% – 65% 0% – 10% 0% – 40% 0% – 10% 0% – 25% 40% – 100% N/A

NZ and Australian Shares 5% – 25% 5% – 15% 5% – 40% 35% – 45% 10% – 40% 0% – 10% 15% – 25%

International Shares 5% – 25% 5% – 15% 10% – 40% 35% – 45% 20% – 60% 0% – 20% 35% – 45%

Property 0% – 20% 0% – 10% 0% – 20% 2.5% – 10% 0% – 20% N/A N/A


Asset Class Conservative

Kiwi Fund

Balanced Kiwi Fund

Asset Class Growth

Kiwi Fund

Growth Kiwi Fund


Ethical Kiwi Fund

Aggressive Kiwi Fund*

Options contracts, cash and fixed interest 10% – 40%

Growth assets 60% – 90%

circumstances do change we recommend that you consult an Authorised

Financial Adviser to determine an appropriate Investment Direction.

Investment Funds

The Scheme’s Investment Funds are listed below:



Asset Class Conservative Kiwi Fund

Balanced Kiwi Fund (Default Investment Fund)

Ethical Kiwi Fund

Growth Kiwi Fund

Asset Class Growth Kiwi Fund

Aggressive Kiwi Fund2

Options Kiwi Fund3

The assets and liabilities attributable to each Investment Fund in the

Scheme are segregated from the assets and liabilities of each other

Investment Fund and the Manager keeps separate records for each

Investment Fund. However, the Scheme is a single trust fund.

Each Investment Fund consists of a mix of assets that are determined

on the basis of the investment guidelines applicable to each Investment

Fund. The Manager may change the investment guidelines from time to

time (subject to providing prior notice to the Trustee).

The existing asset allocation ranges contained in the investment

guidelines for the Investment Funds are summarised in the table below:

Options Kiwi Fund**

Fixed interest investments, cash and options contracts 100%

Fidelity KiwiSaver Scheme – in detail (continued)

11

The Scheme:

The name of the scheme is the Fidelity KiwiSaver Scheme (the Scheme).

The Scheme is a KiwiSaver scheme established by trust deed on

27 June 2007. The Scheme is currently governed by a consolidated

trust deed dated 21 September 2012 (as amended by a Deed of

Amendment of Trust Deed dated 13 August 2013 and a Deed of

Amendment of Trust Deed dated 28 March 2014). The Scheme has been

in operation since 27 June 2007.

The Trustee

The trustee of the scheme is Public Trust (the Trustee). As at the date of

this Investment Statement, the Trustee can be contacted at the following

address:

Public Trust

Level 5, 40-42 Queens Drive

Lower Hutt

PO Box 31543

Lower Hutt 5040

Telephone: (04) 978 4497

The Trustee’s address may change from time to time. Please contact the

Fidelity KiwiSaver Scheme on 0800 336 338 for up to date information.

The Trustee has been granted a licence under section 16(1) of the

Securities Trustees and Statutory Supervisors Act 2011 to act as a

trustee in respect of debt securities, unit trusts and KiwiSaver schemes,

and as a statutory supervisor for participatory securities and retirement

villages, for a term expiring 16 January 2018.

A copy of the Trustee’s licence, including the conditions on the licence,

can be obtained at the Financial Markets Authority’s website: www.

fma.govt.nz and clicking on “Help Me Comply”, “Trustees”, “Licenced

Trustees and Statutory Supervisors”, “Public Trust”. As at the date

of this Investment Statement, all of the conditions and reporting

obligations under the Trustee’s licence have been duly satisfied by the

required dates. For any queries about the Trustee’s licence, please

contact the Trustee in the first instance.

.

2. Who is involved in providing it for me?The ManagerGrosvenor Investment Management Limited is the manager (the Manager

or Grosvenor), investment manager and registrar of the Scheme. As at the

date of this Investment Statement, the Manager can be contacted at the

following address:

Grosvenor Investment Management Limited

Level 5, Alcatel-Lucent Building

13-27 Manners Street

Wellington

PO Box 11 872

Wellington 6142

Telephone: 0800 336 338

The Manager’s address may change from time to time. Please

contact the Fidelity KiwiSaver Scheme on 0800 336 338 for

up to date information.

The directors of the Manager as at the date of this Investment Statement

and a brief summary of their relevant qualifications and experience are

set out below:

David Ian Beattie, Wellington

BMS

Mr Beattie is the Joint Chief Executive Officer for the Grosvenor Financial

Services Group and has been appointed as an alternate director for

Allan Yeo.

Stephen Charles Benton, Christchurch

Dip Bus Studies, CFPCM, CLU

Mr Benton is a director of the Manager and the Chairman of the Audit,

Risk and Compliance Committee of the Manager.

Mr Benton is also a director of the Promoter and has 30 years’

experience in the financial services industry, specialising in corporate

financial planning and personal investment advice. Mr Benton has

extensive knowledge and expertise in Government Superannuation and

National Provident Fund analysis and is an Authorised Financial Adviser

and a CFPCM qualified member of the Institute of Financial Advisers.

Peter Brian Christensen, Auckland

BA (Hons), Dip. Tchg, CFPCM

Mr Christensen is a director of the Manager and a member of the Audit,

Risk and Compliance Committee of the Manager.

Mr Christensen is also a director of the Promoter and has over 27 years’

experience in the financial planning industry. Mr Christensen is a key

principal in Camelot NZ Limited Partnership, which is one of the largest

independent financial advisory groups in New Zealand. Mr Christensen

is an Authorised Financial Adviser and a CFPCM qualified member of the

Institute of Financial Advisers.

Paul Gerard Foley, Wellington

LLB, BCA

Mr Foley is the Chairman of the board of directors of the Manager and a

member of the Audit, Risk and Compliance Committee of the Manager.

12

Mr Foley is an independent director.

Mr Foley is also a director of the Promoter and is a senior corporate/

commercial lawyer based in Wellington, where he is a partner in Minter

Ellison Rudd Watts. Mr Foley is Deputy Chairman of the board of the

National Provident Fund and a director of NZX listed, New Zealand Oil

and Gas Limited. Mr Foley has over 25 years’ experience working with

companies in the financial services, manufacturing and energy fields.

Milton John Jennings, Auckland

BCom, CA

Mr Jennings is a director of the Manager.

Mr Jennings is also a director of the Promoter. Mr Jennings is the Chief

Executive Officer of Fidelity Life Assurance Company Limited (Fidelity

Life). Established in 1973, Fidelity Life is the largest New Zealand owned

life insurance company with six offices and over 250 employees. He is

the longest serving CEO in the local life insurance industry and longest

serving director on the Board of the Financial Services Council.

Murray Alexander McCaw, Wellington

AMP Harvard

Mr McCaw is a director of the Manager. Mr McCaw is an independent

director.

Mr McCaw is also a director of the Promoter and has over 20 years’

experience as a Chief Executive and independent director across a

broad spectrum of New Zealand industries, including energy, motor

vehicles and information technology. Amongst other governance roles,

Mr McCaw is Chairman of Luxury Lodges of New Zealand, a member of

the NEC New Zealand Limited Advisory Board, and a trustee and the

Chairman of the Audit Committee of the Hawke’s Bay Sport Park Trust.

Allan Seng Tong Yeo, Brisbane, Australia

BCA (Hons), BA

Mr Yeo is the Managing Director of the Manager.

Mr Yeo is also the Managing Director of the Promoter and has held a

number of senior banking roles with Barclays Bank PLC in New Zealand,

Australia and the United Kingdom. Mr Yeo is currently the Managing

Director of Tranzact Financial Services Limited, in which the Promoter

holds a substantial shareholding. Mr Yeo is also a director of TriMax

Assurance Services Limited, an insurance joint venture company.

The directors of the Manager may change from time to time without

notice. Please contact the Manager for the current names of its directors.

An up to date list of directors of the Manager is also available on the

Companies Office website at http://www.business.govt.nz/companies

The directors of the Manager can be contacted at the address of the

Manager detailed above.

The Manager is also the manager of the Grosvenor KiwiSaver Scheme

and the Grosvenor Investment Series.

The Manager is a wholly owned subsidiary of Grosvenor Financial

Services Group Limited.

Grosvenor Financial Services Group Limited is a promoter of the

Scheme (Promoter).

The contact details of the Promoter and its directors are the same as

the contact details of the Manager detailed above.

Every director of Grosvenor Financial Services Group Limited who is not

also a director of the Manager will also be a promoter of the Scheme. As

at the date of this Investment Statement, every director of the Promoter

is also a director of the Manager.

The directors of the Promoter and the Promoter’s contact details may

change from time to time. Please contact the Manager for current details.

Responsible Investment

Responsible investment, including environmental, social and governance

considerations, is taken into account in the investment policies and

procedure of the Scheme as at the date of this Investment Statement. You

can obtain an explanation of the extent to which responsible investment

is taken into account in those policies and procedures:

on the Manager’s website on the Internet at www.nzkiwisaver.co.nz

which is publicly accessible at all reasonable times; and

from the Manager, free of charge, upon request.

Responsible investment, including environmental, social and

governance considerations, is taken into account in the investment

policies and procedures of the Ethical Kiwi Fund to the extent set out in

the policies and procedures described above.

Currently, best endeavours are used to avoid the Ethical Kiwi Fund

investing in securities issued by organisations which derive a

substantial share of their earnings from the following industries:

tobacco

gambling

alcohol

armament production

See page 5 for more information on the Ethical Kiwi Fund.

As at the date of this Investment Statement, responsible investment

considerations are not taken into account for the investment policies

and procedures for any funds other than the Ethical Kiwi Fund.


13

All employer contributions to a KiwiSaver scheme must be paid through

Inland Revenue except employer contributions for purposes other

than an employee’s retirement benefits which can be paid directly to

the relevant KiwiSaver scheme. All contributions that Inland Revenue

receives on your behalf during the three-month period after the earlier

of the date Inland Revenue receives your first KiwiSaver contribution

and the date when Inland Revenue is given notice or otherwise knows

that you are a member of the Scheme, will generally be forwarded to

the Scheme as soon as practicable after the end of that three-month

period. During such three-month period, such contributions will be held

in an Inland Revenue holding account and accumulate interest (which

is not subject to tax). The three-month period may be extended until

the amount contributed meets the minimum threshold amount agreed

between Inland Revenue and the Manager.

You can also contribute additional amounts via Inland Revenue using

form IR586. No minimum amount applies.

Contributing via Inland Revenue

You, or anybody else on your behalf (except your employer), may at any

time make payment of contributions to Inland Revenue, who will then

forward them onto the Scheme by:

using the “Pay tax” option on your bank’s internet banking facility;

sending a cheque to Inland Revenue; or

paying over the counter at a Westpac bank branch (use the payment

reference KSS plus your IRD number).

When making such contributions to Inland Revenue, the contribution

must be accompanied by your name, address, IRD number and any

other information that Inland Revenue requires.

3. How much do I pay?

The amount that you must contribute to the Scheme will depend

on whether you make contributions to the Scheme directly, have

contributions deducted from your salary or wages by your employer and

paid to the Scheme via Inland Revenue, or you pay contributions to the

Scheme via Inland Revenue.

Contributing via your employer

If you are an employee, your employer must make deductions of

contributions from your salary or wages and pay those contributions to

the Scheme via Inland Revenue. Currently the contributions that your

employer is required to deduct must be either:

3% of your gross salary or wages that you earn at that job; or

4% of your gross salary or wages that you earn at that job; or

8% of your gross salary or wages that you earn at that job.

This amount will be deducted from your after tax pay. Gross salary or

wages has the meaning given to it in the KiwiSaver Act. In summary,

“gross salary or wages” includes most taxable payments of salary

or wages that your employer pays to you and includes overtime

and bonuses.

If you do not specify your contribution rate, the 3% contribution rate

will apply.

To change the rate at which you currently contribute (either 3%, 4% or

8%), you must give notice to your employer. You may only change your

contribution rate at intervals no less than three months apart, unless

your employer agrees otherwise.

You are not required to make these contributions if you have been

granted a contributions holiday by Inland Revenue. For information

on applying for a contributions holiday, please refer to the section on

contributions holidays on pages 29-30.

Your employer will also be required to make a matching contribution

of 3% of your gross salary or wages subject to certain exceptions.

For the purposes of calculating compulsory employer contributions,

the definition of an employee’s gross salary or wages excludes

ACC and weekly compensation payments, parental leave paid from

public funds and redundancy payments. Under current legislation,

and subject to certain conditions, on-going contributions by a member’s

employer to an existing superannuation scheme for the member’s benefit

will count towards the member’s compulsory employer contribution

requirements. Further details about employer contributions are available

from the Manager.

14

Crown contributions and other benefitsThe Government will make certain contributions to a KiwiSaver scheme

of which you are a member. As at the date of this Investment Statement,

the Government contributions are:

a one-off kick start $1,000 contribution if this is the first KiwiSaver

scheme of which you are a member. This $1,000 contribution will be

made approximately three months after the earlier of:

the date of your first contribution to a KiwiSaver scheme; or

the date when Inland Revenue is notified, or otherwise knows,

that you are a member of a KiwiSaver scheme.

If you have transferred from a complying superannuation fund and you

were a member of the complying superannuation fund for more than

three months, the Government contribution will be made as soon as

practicable after the day on which Inland Revenue is given notice that

you have transferred. The $1,000 Government contribution will be

invested in accordance with your Investment Direction.

for the period 1 July to 30 June in each year, for every dollar you

contribute, you will receive a tax credit of fifty cents, up to the

maximum of $521.43 per annum. This tax credit will be paid into

your account following receipt from Inland Revenue. In the year you

first join KiwiSaver, the tax credit will be prorated from the month

you joined.

This may change in the future. The tax credit will not apply in respect

of members under the age of 18, or members who have become

entitled to receive a benefit on end payment date (members who

have reached the later of New Zealand superannuation qualification

age (currently age 65) or who have been a member of a KiwiSaver

scheme for five years) or subject to certain limited exceptions

in respect of members who do not have their principal place

of residence in New Zealand. The tax credit will be invested in

accordance with your Investment Direction.

The Government will also pay a first home deposit subsidy of up to

$5,000 subject to eligibility requirements. Further details on this

subsidy are located under the heading entitled “First home benefit” on

page 23.

The Government contributions may change in the future.

Contributing directly

If you are not employed and would like to make contributions directly

to the Scheme, or you are employed and contributing via your employer

but would like to make additional contributions, you can make

contributions in either of the following two ways. The first is to set up a

direct debit payment to the Scheme’s bank account and the second is

by making lump sum contributions as described in the section below

entitled “Lump sum contributions”.

To make a direct debit payment directly to the Scheme’s bank account

from your bank account, please fill out the direct debit form attached

to this Investment Statement and send it in with your application form.

If you would like to alter, stop or recommence your direct debit, you may

do so at any time provided that you give notice to the Manager that you

intend to do so and that the minimum monthly contribution is met if

you have not stopped contributing.

Lump sum contributionsYou and other persons on your behalf may contribute additional

lump sums to the Scheme. These lump sums will not give rise to any

additional contribution entitlements from your employer.

Payments by cheque must be made out to the Trustee’s nominee

company, Public Trust (Grosvenor) Nominees Limited, and forwarded

to the Manager at the address below:




Wellington

PO Box 11 872

Wellington 6142

Direct debits and payment by cheque must be accompanied by your IRD

number. If any payments are not accompanied by your IRD number, the

Manager may not be able to process the payment and allocate units to

your account in the Scheme.

If at any time the value of your Member’s Accumulation is nil or negative,

you will cease to be a member of the Scheme.


15

Transferring from another superannuation scheme

You may transfer any amount into the Scheme from any other KiwiSaver

or superannuation scheme. By joining the Scheme you will be initiating

the closure of your membership in your current KiwiSaver scheme and

the transfer of your benefit to the Scheme.

Transfers of funds from UK pension plans to the schemeThis summary of the implications of transferring your UK Pension plan

funds to the Scheme is based on the Manager’s understanding of UK

Pension rules as at the date of this Investment Statement. Future changes

to those rules could subsequently and adversely affect the treatment of

UK Pension plan transfers to the Scheme and payments from the Scheme.

The Scheme is a qualifying recognised overseas pension scheme

(QROPS), accepted by Her Majesty’s Revenue and Customs (HMRC) as

such. This means that transfers from a UK Pension plan to the Scheme

will not incur HMRC tax charges if the amount transferred is within your

remaining “lifetime allowance”.

If your UK Pension plan contains any guaranteed minimum benefits such

as those contained in a defined benefit scheme or a final salary scheme,

such guarantees will not apply to any sums transferred from the UK

Pension plan to the Scheme.

If you transfer funds from a UK pension plan to the Scheme, you will only

be able to access those funds by making a permitted withdrawal under

the KiwiSaver Act.

Until you have been a UK tax non-resident for five clear and complete UK

tax years (the UK tax year runs from 6 April to 5 April), any withdrawals

or transfers you make from the Scheme may render you liable for HMRC

tax charges. These may be significant, up to 55% of the withdrawal or

transfer amount. The imposition of these tax charges depends on the

application of the complex rules applying to UK pension schemes. We

therefore recommend you take professional tax advice if you wish to make

a withdrawal or transfer from the Scheme within this five year period.

16

As a condition of the Scheme’s QROPS status, the Manager must

report to HMRC about the withdrawals or transfers you make from the

Scheme. By transferring your UK Pension plan funds to the Scheme, you

authorise this reporting to occur and agree to provide the Manager with

any further information it requires to make these reports.

This important information regarding withdrawals of UK Pension plan

funds from the Scheme is also located under the heading entitled “What

returns will I get?”.

Transferring your UK Pension plan funds to the Scheme is an

important decision. It is recommended that you discuss proposed

transfers with your UK and New Zealand tax advisers as well as your

UK pension provider.

The Manager may impose conditions on any UK Pension plan funds

transferred. The Manager does not guarantee that the Scheme will

retain QROPS status at all times. If the QROPS status of the Scheme is

lost, your UK tax implications may change in relation to transfers into

the Scheme.

None of the Manager, Trustee or any other person involved in providing

the Scheme to you takes any responsibility for any HMRC tax charges

that arise as a result of you transferring your UK Pension plan funds

to the Scheme, making subsequent withdrawals or transfers from the

Scheme or the Scheme losing its QROPS status.

Account

When you become a member of the Scheme, the Manager will establish

an account, in your name. The balance of your account is measured in

“units”. The units represent the interests that you hold in the various

Investment Funds you have chosen. When contributions are received

into the relevant Investment Fund, you are effectively “buying” a number

of units at what is known as the “Unit Price”. The Unit Price reflects the

value of the investments made by each Investment Fund, and as the value

of the investments rise or fall in value, so too does the value of each unit.

Investment fund units

The number of units that you receive for contributions made to the

Scheme on your behalf will be calculated by dividing the amount

contributed including interest accrued (if any) (net of the amount that

the Manager considers appropriate to deduct for fees, expenses, or

other liabilities) at the relevant Unit Price immediately following the

determination of the Unit Price on the first “Valuation Time” after receipt

and allocation of the contribution or transfer to a Members Account.

Each unit held in your account gives you the right to participate in any

profits or losses of the relevant Investment Fund or Investment Funds

you choose to invest in. However, units held in your account do not give

you any interest over any particular part of an Investment Fund or any of

the assets of any Investment Fund.

Investment DirectionWhen you apply for membership in the Scheme, you are required to

provide an Investment Direction (including Life Phases (see pages

9-10 for more detail)). The Investment Direction must specify the

proportion of one or more Investment Funds in which you would like your

contributions and other amounts received by the Scheme on your behalf

invested.

For example, you could provide an Investment Direction that states that

you would like your contributions invested 15% in the Conservative Kiwi

Fund, 50% in the Balanced Kiwi Fund and 35% in the Growth Kiwi Fund.

The result would be that for every $100 of contributions made to the

Scheme on your behalf:

$15 would be invested in units in the Conservative Kiwi Fund

$50 would be invested in units in the Balanced Kiwi Fund

$35 would be invested in units in the Growth Kiwi Fund.

If you do not provide an Investment Direction, or provide an incorrect

Investment Direction, the contributions made to your account will be

invested in units in the Default Investment Fund (currently the Balanced

Kiwi Fund).

Switching Investment FundsYou can amend your Investment Direction to switch Investment Funds

without charge once a calendar month in respect to future contributions,

and/or contributions already invested. A $60 fee will apply for any switches

after the first one, each calendar month.

Cooling offNew employees of an employer who has selected the Scheme as the

Employer’s Chosen Scheme who are not already members of another

KiwiSaver scheme will automatically become members of the Scheme.

Such Members may choose to opt out of membership of the Scheme at any

time from the 13th day to the 55th day after starting the new employment.

A new employee wishing to opt out of the Scheme must give an opt out

notice either to their employer or to Inland Revenue in the form of the opt

out notice contained in the employee’s KiwiSaver information pack or in

any other form acceptable to Inland Revenue.


2 The Aggressive Kiwi Fund is a high risk fund and is subject to significant volatility. The Aggressive Kiwi Fund invests in funds which use gearing and derivatives (options contracts) that could enhance any returns or increase losses. The Aggressive Kiwi Fund has a substantial holding in shares, which are susceptible to the risk that their value will fall due to either a general market fall, due to economic downturn or political or legislative change, or stock specific factors such as poor company management, poor company results or change in demand for a share. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Aggressive Kiwi Fund is appropriate for you and, if so, what proportion of your investment should be in the Aggressive Kiwi Fund.

3 The Options Kiwi Fund is a high risk fund and is subject to significant volatility in short term returns. The Options Kiwi Fund invests in funds which use gearing and derivatives (options contracts) that could enhance any returns or generate substantial losses. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Options Kiwi Fund is appropriate for you and, if so, what proportion of your investment should be in the Options Kiwi Fund.


17

Capital Guaranteed Kiwi Fund1 0.06%

Conservative Kiwi Fund 0.10%

Asset Class Conservative Kiwi Fund 0.56%

Balanced Kiwi Fund 0.14%

Ethical Kiwi Fund 0.16%

Growth Kiwi Fund 0.17%

Asset Class Growth Kiwi Fund 0.65%

Aggressive Kiwi Fund2 0.28%

Options Kiwi Fund3 0.40%

Investment Fund External investment management fee


2 The Aggressive Kiwi Fund is a high risk fund and is subject to significant volatility. The Aggressive Kiwi Fund invests in funds which use gearing and derivatives (options contracts) that could enhance any returns or increase losses. The Aggressive Kiwi Fund has a substantial holding in shares, which are susceptible to the risk that their value will fall due to either a general market fall or stock specific factors. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Aggressive Kiwi Fund is appropriate for you and, if so, what proportion of your investment should be in the Aggressive Kiwi Fund.

3 The Options Kiwi Fund is a high risk fund and is subject to significant volatility in short term returns. The Options Kiwi Fund invests in funds which use gearing and derivatives (options contracts) that could enhance any returns or generate substantial losses. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Options Kiwi Fund is appropriate for you and, if so, what proportion of your investment should be in the Options Kiwi Fund.

4 The Unit Price will drop if the performance fee is higher than the Manager has allowed for when calculating the Unit Price. Similarly, the Unit Price will rise if the performance fee is lower than the Manager has allowed for when calculating the Unit Price.

Performance fee

The Manager can delegate fund management of part or all of each

Investment Fund to external fund managers. Management agreements

with some external fund managers may include a performance fee that is

designed to reward an external fund manager for superior performance.

The performance fee is calculated on an annual basis but accruals for

it will be made in the unit pricing (this means that the Unit Price for any

Investment Fund for which a performance fee is payable should not

materially drop when the performance fee is payable)4. Performance

fees cannot be quantified in advance. As of the date of this Investment

Statement, performance fees may apply to external fund managers in

the Options Kiwi Fund and the Aggresive Kiwi Fund, as follows:

Options Kiwi Fund (invests in a Tyndall fund):

Tyndall is entitled to a performance fee of 10% of the gross

return of the Tyndall Option Fund for returns achieved by the

Tyndall Options Fund in excess of 16% per annum.

Aggressive Kiwi Fund (may invest in a Tyndall fund):

Tyndall is entitled to a performance fee of 10% of the gross

return of the Tyndall Option Fund for returns achieved by the

Tyndall Options Fund in excess of 16% per annum.

Trustee fee

Up to 0.065% per annum from the Scheme calculated as a percentage

of the total net asset value (before any portfolio investment entity tax

liability) of all Investment Funds under management in the Scheme and

calculated daily and payable monthly in arrears (subject to a minimum

4. What are the charges?

The fees that you pay are set out below.

Entry/exit fees

No entry or exit fees are payable.

Member fee

$3.03 per member per month will be debited to your account regardless

of the number of Investment Funds chosen. This fee may be increased

each year in line with the Statistics New Zealand Consumer Price Index

(CPI) for the prior calendar year, effective from the next Scheme year

(1 April). The amount of any increase will be advised in the annual

member statement. The member fee is payable by selling units from

your account.

Administration fees

The administration fees vary between Investment Funds and are set out

below. These fees are calculated daily as a percentage of the net asset

value of each Investment Fund and deducted each month. These fees

are deducted from each Investment Fund and, as a result, reduce the

unit price of each Investment Fund.

External investment management fees

The external investment management fees vary between Investment

Funds and are set out below. These fees are calculated daily as

a percentage of the net asset value of each Investment Fund and

deducted each month. These fees are deducted from each Investment

Fund and, as a result, reduce the unit price of each Investment Fund.

Capital Guaranteed Kiwi Fund1 0.70%

Conservative Kiwi Fund 0.75%

Asset Class Conservative Kiwi Fund 0.50%

Balanced Kiwi Fund 0.75%

Ethical Kiwi Fund 1.00%

Growth Kiwi Fund 0.80%

Asset Class Growth Kiwi Fund 0.50%

Aggressive Kiwi Fund2 0.75%

Options Kiwi Fund3 0.60%

Investment Fund Administration fee

18

annual fee of $10,000). The trustee fee may be altered by agreement

between the Manager and the Trustee, subject to the maximum fee cap

below.

Switching fee

You may make one switch between Investment Funds each calendar

month free of charge. Your account will be charged a switching fee of

$60 per switch for any additional switches paid by selling units in your

account. This fee may be indexed, at the Manager’s discretion, against

the CPI each year.

Foreign exchange facilitation fee

Up to 0.50% of the net amount of any foreign exchange transactions

undertaken by an Investment Fund. This fee is deducted from the

Investment Fund concerned and, as a result, reduces the unit price of

the Investment Fund (this fee will only be charged from 1 July 2014).

Subject to approval by the Financial Markets Authority and to the

requirement for fees not to be unreasonable, there are no limits on the

amount of the member fee and the switching fee.

Expenses

The Trustee and the Manager are entitled to be reimbursed out

of the Scheme for all costs, charges and expenses incurred in the

administration and management of the Scheme. This includes such

expenses as audit, registry and legal fees. All of the Investment Funds

may invest in other funds that may be issued or managed by external

fund managers and in which fees and expenses are charged. This

includes where the Investment Funds invest in external funds that are

managed by the Manager or a related party of the Manager, or that

are supervised by the Trustee or a related party of the Trustee. These

charges will affect returns to Members and will be reflected in the Unit

Price of the relevant Investment Fund. By joining the Scheme, Members

accept and authorise these types of deductions.

Fee Cap

The administration fees, external investment management fees and

trustee fee may be altered by agreement between the Trustee and

the Manager, subject to a maximum fee cap of 1.5% per annum of

the net asset value of all funds under management in the Scheme.

This fee cap applies to the fees payable out of Investment Funds

under management in the Scheme and not to other amounts payable

to the Manager and Trustee such as the member fee and switching fee.

There is no limit on the reimbursement of expenses incurred in the

administration and management of the Scheme.

This maximum fee of 1.5% may be indexed, at the Manager’s discretion,

each year using the CPI. This means that the Manager can choose to

increase this maximum amount at the rate of inflation.

General

Payment of fees

The administration fees, external investment management fees and

trustee fees and expenses are generally met by the Scheme by way

of deduction from investment income and assets of the relevant

Investment Funds. Therefore these fees and expenses are reflected in

the Unit Price of the relevant Investment Fund.

The member fee and switching fee and any administration and

management costs, charges and expenses which are directly

attributable to a member are deducted by cancelling units in the

member’s account, on a pro-rata basis across the Investment Funds in

which the member has an interest.

Ability to change fees

Other than as stated above, or as required as a consequence of legal or

regulatory changes, the Manager and Trustee have no ability to increase

the fees stated above without obtaining the consent of all affected

members.

Total expense ratio

Each Investment Fund’s total expense ratio (calculated in accordance

with the KiwiSaver (Periodic Disclosure) Regulations 2013) will be

available on the Manager’s website at www.nzkiwisaver.co.nz within 60

working days of 31 March each year.

Tax

All fees noted above are gross of tax (other than GST) unless

otherwise stated.

Where possible the Manager may claim tax deductions in respect to the

fees to the extent permitted under income tax legislation. Members may

get the indirect benefit of such tax deductions.

GST

All fees are stated on an exclusive of GST basis. Under current law some

fees are wholly or partially exempt from GST. If GST is payable on any of the

fees, then the GST component is payable in addition to the fees stated.

1 For details of the guarantees provided by Fidelity Life to the Trustee in respect of the Unit Price of Units in the Capital Guaranteed Kiwi Fund as at 31 March 2014 and 31 March 2015 (and the Manager’s intentions with regard to a replacement guarantee as at 31 March in each subsequent year), see pages 19-21.


19

5. What returns will I get?

Returns from the Scheme are reflected through the increase or decrease

in the Unit Price of the Investment Fund(s) in which you have invested.

The Unit Price of an Investment Fund is the price paid or received when

you invest in units in, or redeem units from, an Investment Fund.

An Investment Fund’s Unit Price is determined by dividing the total

assets of the Investment Fund (determined at the current fair market

value), plus any income accruing from the assets (or an appropriate

part thereof) and any other appropriate amounts as determined by

the Manager, less liabilities, costs, charges and other amounts as

determined by the Manager, by the number of units on issue for that

Investment Fund. An Investment Fund’s Unit Price will therefore reflect

any capital growth or loss on the value of the assets, as well as any

income earned after payment of any expenses.

Key factors that may affect returns:

The return that you get when receiving a benefit will depend on such

factors as:

the amount you, your employer, the Crown and anyone else has

contributed to the Scheme on your behalf;

the time period over which you contributed;

the performance of the Investment Fund(s) (which may vary) in

which you have directed the Manager to invest contributions made

to the Scheme on your behalf, or which you have been allocated to,

including Life Phases;

the mix of Investment Funds that you choose to invest in;

the amount of fees, charges, expenses and taxes; and

if relevant, the effect of the guarantees provided in respect of

the Unit Price of units in the Capital Guaranteed Kiwi Fund as at

31 March 2014 and 31 March 2015 (discussed below).

If an Investment Fund is wound up, subject to the KiwiSaver Act,

the Manager will direct the Trustee to retain such amount which the

Manager considers necessary and appropriate to meet all claims,

liabilities (including contingent liabilities) and expenses, which in the

Manager’s opinion ought to be met out of the wound up Investment

Fund’s assets. This is likely to affect the returns you get.

As you will only receive returns when you receive a benefit (described

below), the dates on which the returns will be paid to you are unknown

as at the date of this Investment Statement.

The returns from each Investment Fund are not guaranteed and may

vary significantly from year to year. There may be times when the

Investment Funds you have chosen or that have been allocated to you

do not perform as expected and returns could even be negative, despite

the skill and care of the Manager. This could be due to the state of the

economy (international and domestic), world markets, interest rate

movements, the performance of individual companies contained in your

Investment Funds, or Government policy.

The Manager of the Scheme, Grosvenor Investment Management

Limited, is legally liable to pay any returns to you.

There is no Crown guarantee in respect of the performance of the

Scheme or any investment product of the Scheme. Neither the Manager

or Trustee nor any of their directors guarantee or promise the return of

capital or income from the Scheme. The guarantees in relation to the

Capital Guaranteed Kiwi Fund are provided by Fidelity Life in respect

of the Unit Price of units in the Capital Guaranteed Kiwi Fund as at

31 March 2014 and 31 March 2015. The Manager’s intentions with

regard to a replacement guarantee as at 31 March in each subsequent

year is discussed below under the heading “Capital Guaranteed Kiwi

Fund”.

Returns reported are a reflection of past performance and are not indicative

of future performance. Investment markets continue to be volatile and

returns will fluctuate (move up or down) according to market conditions.

Capital Guaranteed Kiwi Fund

Fidelity Life has provided a guarantee to the Trustee on behalf of members

who hold Units in the Capital Guaranteed Kiwi Fund in respect of the Unit

Price of Units in the Capital Guaranteed Kiwi Fund on 31 March 2014. This

guarantee only guarantees that on 31 March 2014 the Unit Price of the

Capital Guaranteed Kiwi Fund will not be less than $2.502343.

Fidelity Life has also provided a guarantee to the Trustee on behalf of

members who hold Units in the Capital Guaranteed Kiwi Fund in respect

of the Unit Price of Units in the Capital Guaranteed Kiwi Fund on 31 March

2015. This guarantee only guarantees that on 31 March 2015 the Unit

Price of the Capital Guaranteed Kiwi Fund will not be less than the Unit

Price on 31 March 2014.

Fidelity Life does not guarantee the Unit Price of the Capital Guaranteed

Kiwi Fund on any dates other than 31 March 2014 and 31 March 2015.

As at the date of this Investment Statement, the Manager intends, on

and from 1 April 2015, to arrange for the provision of a guarantee by an

appropriate Grosvenor entity, as negotiated with the Trustee (to replace

Fidelity Life’s guarantees), that the Unit Price of the Capital Guaranteed

Kiwi Fund on 31 March in each subsequent year will be no less than the

Unit Price of the Capital Guaranteed Kiwi Fund on the preceding 31 March.

It is intended that the terms of any replacement guarantee will be on

materially the same terms as provided in the guarantees from Fidelity Life.

The guarantees currently provided by Fidelity Life are on substantially

the same terms as those on which Fidelity Life previously provided its

guarantee of the Capital Guaranteed Kiwi Fund except that references to

Fidelity Life acting as manager of the Scheme and having certain powers

in respect of the Scheme as manager have been amended to refer to

Grosvenor as the current manager of the Scheme.

20

Copies of the guarantees have been attached to the most recent

amendment to the current registered prospectus filed for the Scheme.

A copy of that prospectus is available at: http://www.business.govt.nz/

companies

Fidelity Life is required to give effect to its obligations under the

guarantees by transferring into the Scheme (for the Capital Guaranteed

Kiwi Fund) investment assets of a value sufficient to ensure the Unit

Price of the Capital Guaranteed Kiwi Fund meets the guaranteed value

on 31 March 2014 and 31 March 2015 (as applicable). The investment

assets transferred must be authorised investments for the Capital

Guaranteed Kiwi Fund and will be valued in accordance with the valuation

methodology set out in the Trust Deed.

At the date of this Investment Statement, the guarantees of the Capital

Guaranteed Kiwi Fund have never been required to be called upon,

although this could change in the future.

There are certain limitations on the guarantee.

The guarantees are in favour of the Trustee and for the benefit of

Members holding units in the Capital Guaranteed Kiwi Fund.

The guarantees are not enforceable by Members directly against

Fidelity Life.

Members may suffer a loss of capital if they withdraw from the

Capital Guaranteed Kiwi Fund or switch to another Investment Fund

or transfer to another KiwiSaver Scheme before 31 March 2014 and

therefore before Fidelity Life transfers assets into the Scheme as

required by the guarantees.

Members may suffer a loss of capital if they withdraw from the

Capital Guaranteed Kiwi Fund or switch to another Investment

Fund or transfer to another KiwiSaver Scheme after 31 March 2014

notwithstanding that Fidelity Life has transferred assets into the

Scheme as required by the guarantees. This could be caused by

a further deterioration in the value of the assets of the Capital

Guaranteed Kiwi Fund following 31 March 2014.

Grosvenor reserves the right:

to temporarily close the Capital Guaranteed Kiwi Fund to new

Members or to transfers from other Investment Funds at any time

if the Manager believes there is a significant risk that the Unit

Price guarantee contribution will be required;

to change the asset mix of the Capital Guaranteed Kiwi Fund in

accordance with the Trust Deed and Deed of Establishment of

the Capital Guaranteed Kiwi Fund at any time for the purposes

of safeguarding the assets of the Capital Guaranteed Kiwi Fund;

and/or,

with prior written notice to the Trustee (as soon as practicable

prior to doing so and including an explanation with its reasons

for doing so), at any time or on such terms and conditions

the Manager thinks fit, to close and/or wind up the Capital

Guaranteed Kiwi Fund.

Withdrawal of benefits on 31 March 2014

Members invested in the Capital Guaranteed Kiwi Fund that are entitled

to receive benefits from the Scheme (see pages 22-25) may withdraw

from the Capital Guaranteed Kiwi Fund on 31 March 2014 by advising

the Manager on or before 5.00 p.m. on 31 March 2014 that the Member

wishes to withdraw on that date. By withdrawing from the Capital

Guaranteed Kiwi Fund on 31 March 2014, the Member ensures that the

Unit Price the Member receives will be not less than $2.502343.

Withdrawal of benefits on 31 March 2015

Members invested in the Capital Guaranteed Kiwi Fund that are entitled

to receive benefits from the Scheme (see pages 22-25) may withdraw

from the Capital Guaranteed Kiwi Fund on 31 March 2015 by advising

the Manager on or before 5.00 p.m. on 31 March 2015 that the Member

wishes to withdraw on that date. By withdrawing from the Capital

Guaranteed Kiwi Fund on 31 March 2015, the Member ensures that the

Unit Price the Member receives will be not less than the Unit Price on 31

March 2014.

Switching to another Investment Fund on 31 March 2014

Members invested in the Capital Guaranteed Kiwi Fund may switch from

the Capital Guaranteed Kiwi Fund to another Investment Fund in the

Scheme on 31 March 2014 by advising the Manager on or before 5.00

p.m. on 31 March 2014 that the Member wishes to switch on that date.

By switching from the Capital Guaranteed Kiwi Fund on 31 March 2014,

the Member ensures that the Unit Price the Member receives will be not

less than $2.502343.

Switching to another Investment Fund on 31 March 2015

Members invested in the Capital Guaranteed Kiwi Fund may switch from

the Capital Guaranteed Kiwi Fund to another Investment Fund in the

Scheme on 31 March 2015 by advising the Manager on or before 5.00

p.m. on 31 March 2015 that the Member wishes to switch on that date.

By switching from the Capital Guaranteed Kiwi Fund on 31 March 2015,

the Member ensures that the Unit Price the Member receives will be not

less than the Unit Price on 31 March 2014.

Transfers to another KiwiSaver Scheme

As the Manager is unable to control when it receives a request to transfer

from another KiwiSaver scheme provider in respect of a Member, such

requests may not be received and processed on 31 March 2014 or 31

March 2015 (as applicable). In such circumstances, the Member cannot

be sure that the Unit Price the Member receives will be not less than

$2.502343 or the Unit Price on 31 March 2014 (as applicable).

The Manager reserves the right to refuse requests to invest in the

Capital Guaranteed Kiwi Fund whether by way of an existing member’s

Investment Direction (including if a member selects Life Phases) or as set

out in an application for membership in the Scheme, without giving any

reasons for such a refusal.


21

Fidelity Life’s obligation to pay under the guarantees is at all times

subordinated to its obligation to pay all life insurance policyholder

liabilities of Fidelity Life. This means that in a liquidation of Fidelity Life

or otherwise, Fidelity Life will only be required to meet its obligations

under the guarantees after all life insurance policyholder liabilities have

been paid in full. Fidelity Life’s obligations under the guarantees are also

unsecured and will rank behind all secured and preferential creditors of

Fidelity Life and equally with all other unsecured creditors. There are no

restrictions on the amount of insurance policyholder liabilities or secured

or unsecured creditors that Fidelity Life may incur during the term of the

guarantees and no obligation to advise members or the Trustee of the

amount of those liabilities at any time.

Fidelity Life’s most recent audited financial statements at 30 June 2013

showed net tangible assets of $150,423,000 and disclosed that there

were no contingent liabilities that could materially affect those net

tangible assets.

This position will change over time. Fidelity Life does not give any

commitment to maintain net tangible assets of any specified amount.

The financial statements of Fidelity Life are available on the Companies

Office website http://www.business.govt.nz/companies

At the date of this Investment Statement, none of the Manager, the

Promoter, the Trustee or their directors guarantee or promise the return

of capital or income from the Scheme, except that as stated above, the

Manager intends, on and from 1 April 2015, to arrange for the provision

of a guarantee by an appropriate Grosvenor entity, as negotiated with

the Trustee (to replace Fidelity Life’s guarantee), that the Unit Price of the

Capital Guaranteed Kiwi Fund on 31 March in each subsequent year will

be no less than the Unit Price of the Capital Guaranteed Kiwi Fund on the

preceding 31 March. If such a replacement guarantee is provided by an

appropriate Grosvenor entity, it will be provided on substantially the same

terms as provided in the guarantees from Fidelity Life.

Taxation

The information in this section is intended as general guidance only

and is based on legislation in effect as at the date of this Investment

Statement. It is recommended that you seek professional tax advice

regarding your individual circumstances, or to clarify any of the

following, prior to investing. Neither the Trustee nor the Manager

accepts any responsibility for the taxation consequences of your

investment in the Scheme.

The Scheme is registered as a portfolio investment entity (PIE) and the

following comments are based on the Scheme remaining a PIE.

Portfolio Investment Entity (PIE) Tax

Under the PIE regime, taxable income earned by the Scheme will be

attributed to all members in accordance with the proportion of their

interest in the overall Scheme. The income attributed to each member

will be taxed at the member’s prescribed investor rate (PIR). A PIR is

similar to an individual’s marginal tax rate, but it is capped at 28%.

The Manager will pay tax on behalf of the members and undertake any

adjustments to members’ interests in the Scheme in order to comply with

the PIE tax requirements. This tax is likely to affect the returns you get.

At the date of this Investment Statement the applicable PIRs are 10.5%,

17.5% or 28%.

In order to qualify for the 10.5% PIR, a member must be a New Zealand

tax resident and, in either of the two income years1 immediately before

the tax year in question, the member’s:

taxable income was $14,000 or less; and

combined taxable income and attributed PIE income after

subtracting any attributable PIE loss was $48,000 or less.

In order to qualify for the 17.5% PIR, a member must be a New Zealand

tax resident and, in either of the two income years immediately before

the tax year in question:

the member’s taxable income was $48,000 or less;

the member’s combined taxable income and attributed PIE income

after subtracting any attributable PIE loss was $70,000 or less; and

the 10.5% rate does not apply for the current income year.

If the member does not qualify for the 10.5% or 17.5% PIRs, the

member’s PIR will be 28%. A non-resident member’s PIR will be 28%.

When a member makes an application to become a member of the

Scheme they must advise the Manager of their PIR. Members will

also be able to advise the Manager of their PIR at any time, including

when it changes, by contacting the Manager using the contact details

provided in the application form attached to this Investment Statement.

If a member does not provide a PIR or their valid IRD number to the

Manager, the income attributed to the member in the Scheme will be

taxed at 28%. Further information regarding PIRs may be viewed at

Inland Revenue website (www.ird.govt.nz/toii/pir/workout/).

If a PIE makes a loss or there are excess tax credits for a period, the

Scheme should receive a tax credit from Inland Revenue and will be able

to issue additional Units in Investment Funds to Members’ Accounts and

Reserve Accounts on account of that rebate.

22

Generally, provided members advise the Manager of a valid IRD

number and the correct PIR, tax paid by a PIE on income attributed to

members will be a final tax. Therefore in most circumstances members

will not have an obligation to file a tax return in respect of PIE income.

Additionally, the income attributed to members by the Scheme will not

have an impact on family assistance eligibility, student loan repayment

obligations and child support obligations. If a member’s PIE income

is taxed at a higher PIR and the member is eligible for a lower PIR, but

has not advised the Manager of this, the member will not be able to

receive a refund of the overpayment of tax. Additionally, if a member has

advised the Manager that the member is eligible for a lower PIR and this

is incorrect and the member is only eligible for a higher PIR, the member

may be liable to Inland Revenue for further tax and penalties and have

to file a tax return. It is intended that the Scheme pays members’ PIE tax

to Inland Revenue annually. The Manager will cancel Units in Members’

Accounts and any Reserve Accounts as soon as practicable after

31 March to pay any PIE tax and in any case within the legislative

timeframe of two months.

Members should note that Inland Revenue will be able to require

the Manager to disregard a PIR notified by a member if Inland Revenue

considers the rate to be incorrect. In such circumstances, Inland Revenue

will advise the Manager of the PIR that should be applied to

the member’s PIE income.

As the Scheme is registered as a PIE, any capital gains made by the

Scheme in respect to shares in New Zealand resident companies and

certain Australian resident listed companies are excluded from the

calculation of taxable income. Most overseas shares and interests in

managed funds held by the Scheme will be taxed under the foreign

investment fund (FIF) regime, generally using the fair dividend rate (FDR)

method. Under the FDR method, the Scheme will be deemed to have

derived income equal to 5% of the market value of its overseas shares

and interests in managed funds calculated on a daily basis (and any

dividends or other returns flowing from overseas shares and interests

in managed funds will not be separately taxed in New Zealand). Also

under the FDR method, tax deductions may not be made for any losses

in respect of holdings in overseas shares and interests in managed

funds. Other income of the Scheme (e.g. interest on bank deposits) is

subject to the relevant normal tax rules. Tax may be imposed in overseas

jurisdictions in relation to overseas investments (although this may give

rise to a tax credit in New Zealand).

Contributing to the Scheme – Employer’s Superannuation Contribution

Tax (ESCT) exemption

Contributions by members to the Scheme are deducted from tax-paid

salary or wages (although the level of contribution is calculated on

gross (pre-tax) salary or wages).

Generally, employer contributions to KiwiSaver schemes are subject to ESCT

except where a member has elected to have the employer contributions

taxed as salary or wages and subject to pay-as-you-earn (PAYE).

ESCT is levied at rates similar to members’ marginal tax rates, and is

payable by the employer.

General comments

Tax law is complex and changes frequently. Contributions are “locked-

in” under the Scheme. Investors should periodically monitor the tax

implications of investing in the Scheme and should not assume that

the position will remain the same as it is when they start investing.

The comments under this section “Taxation” are provided as general

background only and are not a comprehensive discussion of tax issues.

BenefitsAs the Scheme has been set up under the KiwiSaver Act to help

you to save for your retirement, you cannot obtain benefits from the

Scheme until you are eligible as set out in the circumstances below.

It is possible that under the KiwiSaver Act or under the terms of the

Trust Deed, the Manager or Trustee (as applicable) may require certain

information from you in order to ensure that you are eligible to receive a

benefit. The Manager is authorised to withhold and pay any tax payable

in respect to any benefit that is paid to you.

KiwiSaver end payment date benefit

When you reach the later of:

the New Zealand Superannuation qualification age (currently age

65); or

after 5 years membership in KiwiSaver or 5 years after Inland

Revenue first received a contribution in respect of you; or

the date on which the you have been a member of a complying

superannuation fund (or of a complying superannuation fund and a

KiwiSaver scheme) for 5 years,

you are entitled to receive a benefit from the Scheme (this is referred to

as KiwiSaver End Payment Date). A complying superannuation fund is a

superannuation scheme that requires lock-in and other features similar

to a KiwiSaver scheme and which has been approved by the Financial

Markets Authority as a complying superannuation fund. You may choose

to leave some or all of the balance of your interest in the Scheme after

you become eligible to receive this benefit. The amount that you are

eligible to receive as a benefit is equivalent to the total value of the

Investment Fund units held in your account (this amount is referred to

as your Member’s Accumulation).

A member may make partial lump sum withdrawals on or after the

KiwiSaver End Payment Date.


23

1 Grosvenor Assurance Limited is a licensed life insurer under the Insurance (Prudential Supervision) Act 2008.

The Member’s Accumulation in the Scheme is the net value of the

member’s contributions, any employer contributions vested in the

member, any fee subsidies paid in respect of the member, the $1,000

Government kick start contribution, member tax credits, investment

earnings, less fees, tax and any member tax credits required to be

clawed back in respect of periods the member had a principal place of

residence outside New Zealand.

Where you have transferred contributions from an Australian Complying

Superannuation Scheme into KiwiSaver, these amounts (disregarding

any positive or negative gains with regards to the amounts initially

transferred) may be withdrawn from the Scheme when you reach the

age of 60 provided you meet the definition of being retired as set out

under the Australian Scheme rules.

Death benefit

Grosvenor has arranged for Members of the Scheme to have the benefit

of accidental death cover provided by Fidelity Life on the terms set out

below, such cover ceasing to apply from 31 March 2015, or earlier upon

Grosvenor providing prior notice.

Upon termination of the cover provided by Fidelity Life, Grosvenor

intends to arrange for Grosvenor Assurance Limited1 to provide Members

with replacement accidental death cover on essentially the same terms

as the Fidelity Life policy terms set out below.

The terms of the Fidelity Life accidental death cover are that if your

death is the result of an accident, and the value of your Member’s

Accumulation is less than $10,000, Fidelity Life has agreed to “top

up” the death benefit payment to $10,000. This “top up” is only

available if, at the date of your accidental death, you are making regular

contributions to the Scheme and at the date of death were under the age

of eligibility for New Zealand Superannuation but aged at least 10 years.

If the member is under the age of 10 years, Fidelity Life will top up any

payment to $2,000.

The Life Insurance Act 1908 currently prohibits the payment of more than

$2,000 in total in respect of the death of a minor under the age of 10

years. This prohibition relates only to the “top up” payment.

This means that if the value of your Member’s Accumulation is greater

than $10,000 (or $2,000 if you are under 10 years of age) at the time of

your death, then you will not be eligible for the “top up” payment.

The value of any top up will be reduced by the total of any payments

already made on significant financial hardship or serious illness grounds,

or first home withdrawal or as required by other enactments. This might

mean that even though the value of your Member’s Accumulation is less

than $10,000 (or $2,000 if you are under 10 years of age) at the time of

your death, you might not receive a “top up” payment.

“Accidental death” for the purposes of any “top up” referred to above

means death caused solely and directly by violent, accidental, external

and visible means within 12 months of the accident.

Any such replacement accidental death cover arranged by Grosvenor may

be terminated at any time on providing Members notice of termination.

Withdrawal in case of significant financial hardship

You may withdraw an amount no greater than the value of your

Member’s Accumulation, excluding the $1,000 Government Kick Start

contribution and any member tax credits, on the grounds of significant

financial hardship with the approval of the Trustee in accordance

with the KiwiSaver Act. The Trustee must be reasonably satisfied that

reasonable alternative sources of funding have been explored and have

been exhausted. The Trustee may limit the amount you are permitted

to withdraw to a specified amount that, in the Trustee’s opinion, is

required to alleviate the particular hardship you are suffering.

Under the KiwiSaver Act significant financial hardship includes

significant financial difficulties that arise because:

you are unable to meet minimum living expenses; or

you are unable to meet mortgage repayments on your principal

family residence resulting in the mortgagee seeking to enforce the

mortgage on the residence; or

of the cost of modifying a residence to meet your, or a dependant’s,

special needs arising from a disability; or

of the cost of your, or a dependant’s, medical treatment for an

illness or injury; or

of the cost of your, or a dependant’s, palliative care; or

of the cost of a funeral for a dependant; or

you are suffering from a serious illness.

Withdrawal in cases of serious illness

You may withdraw an amount no greater than the value of your Member’s

Accumulation where the Trustee is reasonably satisfied that you are

suffering from serious illness and are in compliance with the requirements

of the KiwiSaver Act. As at the date of this Investment Statement, under the

KiwiSaver Act “serious illness” means an injury, illness or disability:

that results in you being totally and permanently unable to engage in

work for which you are suited by reason of experience, education or

training or any combination of those things; or

that poses a serious and imminent risk of death.

First home benefit

You may be eligible for a first-home deposit subsidy to help with the

cost of a home purchase. The first home deposit subsidy is $1,000 for

each year that a member has been making regular contributions to a

KiwiSaver scheme (maximum $5,000). The member has to meet certain

criteria including having been saving for a minimum period of three

years to access this deposit subsidy. Additional criteria may be imposed

in the future.

24

Please visit the Housing New Zealand website at www.hnzc.co.nz for

more details.

The first home deposit subsidy is restricted by income price caps and

regional house price caps as well as a number of other conditions.

Withdrawals for the purchase of a home

Under the KiwiSaver Act you may be eligible to make a withdrawal

up to the value of your Member’s Accumulation (excluding the

$1,000 Government kick start contribution, any member tax credits

and the amount that was transferred from an Australian complying

superannuation scheme (disregarding any positive or negative

returns for the purpose of calculating that amount)) for the purpose of

purchasing a first home where you have not previously received such a

benefit from any KiwiSaver scheme and you satisfy one of the following

two criteria:

at least three years have passed since Inland Revenue first received

contributions for credit to a KiwiSaver scheme of which you are or

were a member; or

where no such contributions have been paid via Inland Revenue,

you have been a member of a KiwiSaver scheme for a period of three

years or more.

Withdrawal or transfer to foreign scheme in cases of permanent emigration

If you emigrate permanently from New Zealand to a country other

than Australia you may, on application to the Manager, and subject to

compliance with the requirements of the KiwiSaver Act, withdraw an

amount equal to the value of your Member’s Accumulation (excluding

the total amount of any member tax credit), no earlier than one year

after your emigration. Alternatively, you may, on application to the

Manager, at any time after your permanent emigration from New

Zealand, and subject to compliance with the requirements of the

KiwiSaver Act, have the Manager transfer an amount equal to the value

of your Member’s Accumulation (excluding any member tax credit) to

a foreign superannuation scheme authorised for that purpose under

regulations made under the KiwiSaver Act.

If you permanently emigrate to Australia, you will not be able to

withdraw your Member’s Accumulation. Instead you will be able to

transfer your Member’s Accumulation to an Australian Complying

Superannuation Scheme.

Where you apply to transfer your Member’s Accumulation to an

Australian Complying Superannuation Scheme, all of your Member’s

Accumulation will be transferred to the Australian Complying

Superannuation Scheme if they accept the transfer.

If you are planning on permanently emigrating to Australia at any stage

in the future, you should consult with your financial adviser first before

deciding whether joining KiwiSaver is right for you.

Release of funds required under other enactments

The Manager must comply with any enactment requiring it to release

funds from the Scheme, including a requirement to release funds

by order of any Court under any enactment (including the Property

(Relationships) Act 1976).

Method of payment of benefit

The Manager must, at your request, pay a withdrawal permitted under the

Trust Deed or the KiwiSaver Act as a lump sum.

Member tax creditsIf you withdraw your benefit for the purposes of purchasing your first

home or as a result of significant financial hardship, then your member

tax credits will stay in your account. However, if you permanently emigrate

(other than to Australia) and you withdraw or transfer your benefit, any

member tax credits paid into your account since joining will be returned to

the Government. For all other benefits payable, the amount of a member

tax credit may not be withdrawn before you provide a statutory declaration

stating any periods for which you have had your principal place of

residence outside New Zealand. The amount of a member tax credit may

not be withdrawn to the extent to which the Manager or Trustee has notice

that a claim for a member tax credit is wrong.

Withdrawal of funds transferred to your KiwiSaver scheme from a UK pension planThis summary of the implications of withdrawing your UK Pension plan

funds from the Scheme is based on the Manager’s understanding of

UK Pension rules as at the date of this Investment Statement. Future

changes to those rules could subsequently and adversely affect

the treatment of UK Pension plan fund transfers to the Scheme and

payments from the Scheme.

Until you have been a UK tax non-resident for five clear and complete

UK tax years (the UK tax year runs from 6 April to 5 April), any

withdrawals or transfers you make from the Scheme may render you

liable for HMRC tax charges. These may be significant, up to 55% of

the withdrawal or transfer amount. The imposition of these tax charges

depends on the application of the complex rules applying to UK

pension schemes. We therefore recommend you take professional tax

advice if you wish to make a withdrawal or transfer from the Scheme

within this five year period.

As a condition of the Scheme’s QROPS status, the Manager must report to

HMRC about the withdrawals or transfers you make from the Scheme.

By transferring your UK Pension plan funds to the Scheme, you authorise

this reporting to occur and agree to provide the Manager with any further

information it requires to make these reports.

Transferring your UK Pension plan funds to the Scheme is an

important decision. It is recommended that you discuss proposed

transfers with your UK and New Zealand tax advisers as well as your

UK pension provider.


25

The Manager may impose conditions on any UK Pension plan funds

transferred. The Manager does not guarantee that the Scheme will retain

QROPS status at all times. If the QROPS status of the Scheme is lost, your

UK tax implications may change in relation to transfers into the Scheme.

None of the Manager, Trustee or any other person involved in providing

the Scheme to you takes any responsibility for any HMRC tax charges

that arise as a result of you transferring your UK Pension plan funds

to the Scheme, making subsequent withdrawals or transfers from the

Scheme or the Scheme losing its QROPS status.

Law change - Withdrawal to pay tax liability arising on

transfer of foreign superannuation

Recently passed legislation changes the tax treatment of interests in

foreign superannuation schemes held by New Zealand residents. The

changes apply from 1 April 2014. Under the new rules a tax liability will

arise when a lump sum payment from a foreign superannuation scheme

is withdrawn, which will include where there has been a transfer to a

New Zealand or Australian scheme.

The KiwiSaver Act has been amended to expand the category of

permitted withdrawals. If a person transfers money from their foreign

superannuation scheme (other than from an Australian scheme) into a

KiwiSaver scheme, they will be able to apply to their scheme provider

to withdraw an amount from their scheme to pay any tax liability arising

on the transfer. A withdrawal may also be permitted where student

loan repayment obligations arise following the transfer of money

from a foreign superannuation scheme into a KiwiSaver scheme. You

may withdraw an amount no greater than the value of your Member’s

Accumulation, excluding the $1,000 Government kick start contribution

and any member tax credits. An application for withdrawal must be

made within the 24 months from the end of the month in which a

liability for tax or student loan repayments is assessed.

Inland Revenue officials have confirmed with HMRC that the

introduction of this permitted withdrawal mechanism will not impact the

ability of KiwiSaver schemes to qualify as a QROPS.

You should seek independent advice as to how the changes will affect

the tax treatment of any interests you hold in foreign superannuation

schemes and any transfers of money from such schemes. You

should also seek independent advice as to whether a withdrawal

in these circumstances is permitted under the terms of your foreign

superannuation scheme.

Suspension of Scheme or Investment Funds

To the extent permitted by the KiwiSaver Act, if by reason of:

a decision to terminate the Scheme or an Investment Fund; or

financial, political or economic conditions applying in respect of any

financial market in which investments may be sold; or

the nature of any investments of an Investment Fund; or

the occurrence or existence of any other circumstances or events; or

a suspension in respect of an investment fund in which the relevant

Investment Fund has invested in,

the Manager, in good faith, forms the opinion that it is not practicable, or

would be materially prejudicial to the interests of members of the Scheme

or members who have invested in the Investment Fund, as the case may

be, for the Manager to realise investments or for the Trustee to borrow

(at the Manager’s direction) in accordance with the Trust Deed in order to

permit payment of benefits or any transfer between Investment Funds or

any transfer out of the Scheme, then the Manager may (on notice to the

Trustee), to the extent permitted by the KiwiSaver Act, give a suspension

notice (a Suspension Notice) to that effect to the members of the Scheme

or the members who have invested in the Investment Fund as the case

requires provided that to the extent that the Manager requires the

suspension to exceed 10 days, it must obtain the prior written approval

of the Trustee. A Suspension Notice shall have the effect of suspending

the operation of all existing and future benefit requests and payments in

respect of members who have invested in the Scheme or the Investment

Fund, as the case may be, until the earlier of the following events:

the Manager giving notice to the effect that the relevant Suspension

Notice is cancelled either in whole or in part; or

six months from the date of the Suspension Notice; or

the date a suspension is lifted in respect of an investment fund in

which a material amount of the relevant Investment Fund is invested.

In relation to the Capital Guaranteed Kiwi Fund, under the terms of the

guarantees1, the Manager has committed to not allocate, cancel or

otherwise deal with units in that Investment Fund in the period from 31

March 2014 or 31 March 2015 (as applicable) until the time that Fidelity

Life has transferred investment assets into the Capital Guaranteed

Kiwi Fund in satisfaction of its obligations under the guarantees.

Notwithstanding the Manager’s undertaking above, Members may have

their units cancelled after 7 April 2014 or 7 April 2015 (as applicable)

to, for example, pay fees notwithstanding that Fidelity Life is in default

of its obligations to transfer investment assets. Members can decide

whether to redeem their Member’s Accumulation in these circumstances

notwithstanding any default by Fidelity Life, or to continue to hold the

units in anticipation of any default being remedied, including by way of

enforcement by the Trustee of the guarantees.


26

6. What are my risks?

This section contains a summary of the principal risks that the money

that you have contributed to the Scheme, or which has been contributed

on your behalf, may not be recovered in full.

All investments involve some form of risk. The nature of the risks

involved and their effect on your savings in the Scheme will vary

according to the Investment Funds selected. However, there are also

some risks which affect the Scheme generally, irrespective of which

Investment Funds you select.

Some risks are more significant than others. The most important risks

for you to understand fall into the following categories:

you have invested in Investment Funds which are not appropriate for

your financial situation and risk appetite;

the Investment Funds that you have invested in do not perform as

you expect because investment markets do not perform well;

the Investment Funds that you have invested in do not perform as

you expect because of the way the Manager invests your money and

manages the risk;

changes to the law governing or otherwise affecting the Investment

Funds that you have invested in impact on the value of your savings;

and

you have not paid the correct amount of tax.

Inappropriate fund risk

It is important that you invest in the Investment Funds most suited to

you. Investing in the wrong Investment Fund can have a significant

impact on your savings. If you invest in Investment Funds that are too

low risk for your financial situation and risk appetite, the return on

your investments may fall short of your goal. If you invest in Investment

Funds that are too high risk for your financial situation and risk appetite,

market volatility may be more than you are comfortable with. There are

a number of factors you should take into account when selecting the

appropriate Investment Funds for you. You should talk to you financial

adviser about your financial situation and risk appetite.

Investment market risk

If the investments in which the Investment Funds are invested do not

perform well, your returns may be less than you were expecting and

you could potentially receive less than the full amount that you have

contributed, or has been contributed on your behalf, to the Scheme.

There are a number of investment-related risks that can cause the value

of your investments to fall, including:

currency risk – the risk that the value of international investments

may fall because there is a decline in the value of the foreign

currencies in which these investments are held;

interest rate risk – the risk that interest rates on fixed interest

securities increase, causing a drop in the value of current fixed

interest investments. This will have a greater impact on Investment

Funds with higher exposure to fixed interest securities;

share market risk – the risk that share markets or the value of specific

shares drop in response to negative information. This will have a greater

impact on Investment Funds with a higher exposure to shares; and

credit risk – the risk that the value of fixed interest securities drop

because there is a general deterioration in the market’s assessment

of the ability of issuers to meet their future payment obligations. This

will have a greater impact on Investment Funds with higher exposure

to corporate bonds or other fixed interest securities.

Manager risk

The Manager has in place systems to manage investment management

risks. In particular:

currency risk – All international fixed interest securities are

hedged by third parties to remove currency risk (“hedging” is an

investment technique used to offset the risk of potential loss on

one investment – in this case, the risk of the currency in which the

relevant international investments are held falling against the New

Zealand dollar – by purchasing a second investment that is expected

to perform in the opposite way). However, international shares may

not always be hedged, depending on the Manager’s assessment of

the level of the New Zealand dollar relative to the risk. In addition,

the currency risk policies and expertise of all external fund managers

are checked before their appointment and monitored regularly;

interest rate risk – the Investment Funds are invested across a

range of different maturity dates. The Manager also actively changes

the average maturity of the fixed interest securities depending on the

Manager’s assessment of the level of interest rates relative to the risk;

share market risk – the Investment Funds are invested across a

range of different share markets and companies. The Manager also

appoints external fund managers to manage some of the share asset

classes where it believes this complements in-house investment

specialists. Diversification ensures that no single market or company

has too great an impact on an Investment Fund should its share

price fall significantly; and

credit risk – the Investment Funds are diversified to spread the risk

of issuers defaulting on their fixed interest obligations. The Manager

also applies minimum credit risk criteria when selecting appropriate

fixed interest securities for the Investment Funds.

Where Investment Funds invest in other funds issued or managed by

external fund managers, the external fund manager will be responsible

for managing the investment market risks set out above.



27

There is, however, a risk that the Manager (or the external fund

manager) does not adequately manage the investment management

risks set out above.

Regulatory risk

There is the risk that future changes to the law could affect your savings

in the Scheme.

In addition to legislative changes in New Zealand, there is also a risk

that money transferred in from occupational or personal pension plans

in the UK may be at risk of unexpected UK tax liability on withdrawal

from the Scheme. Any UK tax liability is the responsibility of the

member and not the Scheme. Further to this, there is a risk of the

Scheme losing its Qualifying Recognised Overseas Pension Scheme

(QROPS) status at any time. As at the date of this investment statement,

the Scheme has QROPS status. However, the Scheme could lose QROPS

status at any time and neither the Manager nor the Trustee represent

that the Scheme will continue to have QROPS status. If QROPS status

is lost, a member’s UK tax position may change in relation to that

member’s balance in the Scheme and/or future transfers. For further

information on QROPS see pages 15-16.

Tax risk

There is a risk of the Manager either over or under paying tax on your

behalf as a result of you providing the Manager with the wrong PIR or

not advising the Manager to change that rate when it needed to be

changed. In the event of an underpayment of tax, you will be obliged

to pay additional tax (and potentially penalties or interest) to Inland

Revenue. In the event of an overpayment of tax, you will not be able to

receive a refund of the overpayment of tax.

As the Scheme is a portfolio investment entity (PIE), there is a risk that

the Scheme may lose its PIE status if it fails to satisfy the PIE eligibility

criteria (as defined in the Income Tax Act 2007) and that failure is not

remedied within the period permitted under the Income Tax Act 2007.

In this situation, investments in the Scheme will be taxed at 28% on all

taxable income. The Manager has implemented processes to monitor

the Scheme’s on-going PIE eligibility compliance.

Other general risks

There are other risks which may affect your savings, although these are

less significant than the risks described above. These include:

liquidity risk – the risk that the Manager is unable to meet its

payment obligations to Members because of its inability to liquidate

investments in an Investment Fund in a timely fashion. However, it

is the Manager’s policy to invest in securities where there is good

daily liquidity available and a recognised market on which these

securities are traded;

segregation risk – the risk that Members that hold units in an

Investment Fund are exposed to the liabilities assumed by all other

Investment Funds within the Scheme. The Manager manages this

risk, in conjunction with the Trustee, by treating the assets and

liabilities of each Investment Fund as separate and independent

from the assets and liabilities of every other Investment Fund.

However, in the unlikely event that the assets of one Investment

Fund within the Scheme are insufficient to meet the liabilities

attributable to that Investment Fund, those liabilities (other than

any liabilities to a Member) will be met from the assets of the

other Investment Funds in the Scheme. Such allocation to meet the

liabilities will be in such equitable manner as the Manager, with the

approval of the Trustee, sees fit; and

administrative risk – the risk that a technological or other failure

impacts on the Scheme or the markets in which the Scheme invests.

In addition to the general risks summarised above, the following

specific risks apply to certain Investment Funds offered within the

Scheme and Life Phases:

Options Kiwi Fund risk

The Options Kiwi Fund is a high risk fund and is subject to significant

volatility in short term returns. The Options Kiwi Fund invests in funds

which use gearing and derivatives (options contracts) that could

enhance any returns or generate substantial losses by those funds, and

therefore the Options Kiwi Fund. Losses can occur quickly. You should

seek advice from an Authorised Financial Adviser regarding whether the

Options Kiwi Fund is appropriate for you and, if so, what proportion of

your investment should be in the Options Kiwi Fund.

The Manager manages the risks involved in the Options Kiwi Fund by:

limiting the total value of the underwritten option derivatives

contracts relative to the value of the underlying portfolio value;

employing a specialist fixed interest options and derivatives trading

manager who uses disciplined techniques to manage unusual

interest rate movements; and

the fact that the Options Kiwi Fund invests in funds which use

gearing and derivatives rather than use gearing and derivatives

themselves. This means that the exposure of the Options Kiwi

Fund to the downside of that gearing and use of derivatives is

limited to the amount they have each invested in those underlying

investment funds.

Aggressive Kiwi Fund risk

The Aggressive Kiwi Fund is a high risk fund and is subject to significant

volatility. The Aggressive Kiwi Fund invests in funds which use gearing

and derivatives (options contracts) that could enhance any returns or

increase losses by those funds, and therefore by the Aggressive Kiwi

Fund. The Aggressive Kiwi Fund has a substantial holding in shares,

which are susceptible to the risk that their value will fall due to either

a general market fall or stock specific factors. Losses can occur quickly.

You should seek advice from an Authorised Financial Adviser regarding

whether the Aggressive Kiwi Fund is appropriate for you and, if so, what

proportion of your investment should be in the Aggressive Kiwi Fund.

28

The Manager manages the risks involved in the Aggressive Kiwi Fund by:

limiting the total value of the underwritten option derivatives

contracts relative to the value of the underlying portfolio value;

employing a specialist fixed interest options and derivatives trading

manager who uses disciplined techniques to manage unusual

interest rate movements; and

the fact that the Aggressive Kiwi Fund invests in funds which use

gearing and derivatives rather than use gearing and derivatives

themselves. This means that the exposure of the Aggressive Kiwi

Fund to the downside of that gearing and use of derivatives is

limited to the amount they have each invested in those underlying

investment funds.

Capital Guaranteed Kiwi Fund risk

The following risks apply to the Capital Guaranteed Kiwi Fund:

the risk that the resources of Fidelity Life (or any replacement

guarantor) will not be sufficient to fulfil the guarantee obligation

provided by Fidelity Life (or a replacement guarantor) in respect of

the Capital Guaranteed Kiwi Fund at any time, including because of

the subordination of those obligations to the claims against Fidelity

Life (or any replacement guarantor) of insurance policyholders or

other creditors ranking in priority to or equally with the Trustee’s

claims under the guarantees;

the risk that a member will exit the Capital Guaranteed Kiwi Fund

before 31 March 2014 or 31 March 2015 and will therefore not

obtain the benefit of the relevant guarantee in that transfer;

the risk that Fidelity Life or any replacement guarantor does not

otherwise perform its obligations under the relevant guarantee or is

delayed in doing so; and

the risk that the Manager terminates and winds up the Capital

Guaranteed Kiwi Fund at any time before 31 March 2014 or 31 March

2015. This would mean that Members would not receive the benefit

of the guarantees as on the winding up of the Capital Guaranteed

Kiwi Fund their balance in the Capital Guaranteed Kiwi Fund would

be transferred among the other Investment Funds selected in their

Investment Directions or if their Investment Direction does not

select any other Investment Fund then the Members interest will be

allocated to the Default Investment Fund.

The Manager manages the risks involved in the Capital Guaranteed

Kiwi Fund by employing a relatively conservative investment strategy

which has been designed to control the extent to which adverse market

movements might give rise to Fidelity Life (or any replacement guarantor)

being required to transfer assets into the Capital Guarantee Kiwi Fund to

ensure the guaranteed price as at 31 March. The Manager will also alter

the strategy during any year depending upon the extent to which markets

move the underlying Unit Price up or down during the year.

The Manager is unable to control the risk that an individual member

switches investments out of the Capital Guaranteed Kiwi Fund or

withdraws their benefits during the year at a price which may be lower

than the next 31 March guarantee price date, but the conservative

strategy does somewhat limit the extent to which this may be significant.

Life Phases risk

If at the date of the Life Phases Rebalancing the value of the

Investment Fund(s) that you are invested in has decreased due to

market movements, the Rebalancing process may result in a reduced

likelihood of this market value decline being recovered (if at all). This is

because the Life Phases Rebalancing process switches current portfolio

balances into more conservative investments over time. Historically,

conservative investments have tended to produce lower returns than

growth-orientated investments and therefore any switch into a more

conservative risk profile may require a longer period over which to

recover any short term decline in value.

Life Phases may not be appropriate for all members. Life Phases has

been designed for the typical saver committed to saving for retirement.

However, your personal circumstances will change over time and these

changes could result in the Life Phases asset allocation not providing

a level of risk appropriate to your individual situation. If your personal

circumstances do change we recommend that you consult an Authorised

Financial Adviser to determine an appropriate Investment Direction.

Further information in respect of these and other risks (including

gearing risk, secondary market failure, refund of contributions risk,

UK Tax risk and guarantee risk) is set out in the current registered

prospectus for the Scheme.

CONSEQUENCES OF INSOLVENCY

Members have no liability to pay money to any person as a result of the

insolvency of the Scheme.

If the Scheme becomes insolvent, it will be wound up in accordance with

the termination procedures under the Trust Deed. The Scheme can also

be wound up in the circumstances set out under the heading “How do I

cash in my investment?” on page 31. Claims on the assets of the Scheme

that will rank ahead of members in the event of the Scheme being put

into liquidation or being wound up will include any outstanding expenses

(including fees) or liabilities of the Scheme, any claims preferred at law,

tax and the costs of winding up the Scheme. The Manager of the Scheme

will not be entitled to claim any outstanding fees in the event the Scheme

becomes insolvent. If there are any benefits payable under the Trust Deed

and which had become payable prior to the winding up date and remain


29

unpaid as at the winding up date, these will be paid prior to members

who had not at that stage become entitled to receive a benefit.

Members will otherwise rank equally between themselves and will be

paid in accordance with the Trust Deed. If the Scheme winds up and

a member is not entitled to receive a benefit in the circumstances

outlined above, then an amount equal to the value of that Member’s

Accumulation is required under the KiwiSaver Act to be transferred to

another KiwiSaver scheme.

IS THE OPTIONS KIWI FUND FOR ME?

As summarised on page 5, the Options Kiwi Fund is an Investment Fund

which uses an alternative investment strategy investing in funds that use

options derivative contracts to generate excess return premiums over and

above the return on the underlying fixed interest securities in which the

funds invest.

These options contracts are based on movements in Government bond

interest rates. If the 10 year bond rate of the relevant Government moves

by more than a predefined margin (this margin is specific to each option

contract), the funds in which the Options Kiwi Fund invests must pay out

on the options contracts they have entered into. If the movement in the

bond rates is significant, the funds in which the Options Kiwi Fund invests

may be required to pay out a substantial sum and therefore the value of

the units in the Options Kiwi Fund will go down.

For example, during November/December 2008 the value of the Options

Kiwi Fund fell 25% in one month. More recently, in the first 10 days of

August 2011, the Options Kiwi Fund declined in value by 30% as a result

of extreme volatility in long term US interest rates during a period of

significant uncertainty regarding the prognosis for rising US Government

debt levels.

Significant losses can therefore happen quickly and unexpectedly. Whilst

over the medium to long term the Investment Fund is expected to deliver

positive excess returns above average interest rate generating securities,

it is not suited to investors who are not comfortable with the actual losses

of the type described above.

You should therefore seek advice from an Authorised Financial Adviser

regarding whether the Options Kiwi Fund is appropriate for you and, if so,

what proportion of your investment should be in the Options Kiwi Fund.

7. Can the investment be altered?

Your investment can be altered, subject to any restrictions imposed

under the KiwiSaver Act.

Fees

The fees that you must pay in respect of the Scheme may be altered

as described in the section entitled “4. What are the charges?” on

pages 17-18.

Contributions

If you are not employed and therefore are not required to have

deductions of contributions made by your employers, you can increase

or decrease your contributions at any time and suspend or recommence

those contributions at any time on giving notice to the Manager, subject

to the minimum requirements set out under the heading “3. How much

do I pay?” on pages 13-16.

If you are contributing via deductions from your salary or wages, you

may only suspend those contributions by opting out or applying for a

contributions holiday to Inland Revenue (see below).

Currently you can change your contribution rate to either 3% or 4% or

8% of your gross salary or wages (or any other amount permitted under

the KiwiSaver Act), by giving notice to your employer.

Under the KiwiSaver Act, a member who has their employer deduct

contributions from their salary or wages may not change his or her

contribution rate in relation to that employer at intervals that are less

than three months apart unless the employer agrees.

Opting out

New employees of an employer who has selected the Scheme as

the Employer’s Chosen Scheme and who are not already members

of another KiwiSaver scheme will automatically become members

of the Scheme. New employee members may choose to opt out of

membership of the Scheme at any time from the 13th day to the 55th

day after starting the new employment. A new employee wishing to opt

out of the Scheme must give an opt out notice either to their employer

or Inland Revenue in the form of the opt out notice contained in the

employee’s KiwiSaver information pack or in any other form acceptable

to Inland Revenue.

Contributions holiday

You can apply for a contributions holiday where you are contributing via

deductions from salary or wages via your employer (i.e. not by direct

contribution to the Scheme), subject to certain rules, by applying to

Inland Revenue. You cannot apply for a contributions holiday until 12

months have expired since the earlier of:

the date after Inland Revenue received the first contribution in

respect of you; or

30

the date that a KiwiSaver scheme received the first contribution in

respect of you; or

the date that you first became a member of a complying

superannuation fund.

The contributions holiday will be for a minimum period of three months

and a maximum period of five years.

You may apply for a contributions holiday at any time if you are suffering

or likely to suffer financial hardship and at least one contribution has

been received by Inland Revenue. The length of the contributions

holiday in these circumstances is three months, unless Inland Revenue

agrees to a longer period.

Your application to Inland Revenue must contain the following:

your name and address;

your tax file number (IRD number);

the name and address of each of your employers to whom you

intend that the contributions holiday will apply;

the period of time for which the holiday is required;

details of financial hardship if the application is being made

on this ground; and

any other information that Inland Revenue requires.

Inland Revenue is required to grant you a contributions holiday if all

the criteria above are complied with. Inland Revenue will give notice

to you and each of your employers to whom the contributions holiday

will apply and will also give notice to the Manager. Inland Revenue will

notify you before your contributions holiday ends. You can apply for

a new contributions holiday as your existing contributions holiday is

about to end.

While on a contributions holiday you may revoke or reinstate it by

giving notice to your employer or employers. However, you may not

revoke or reinstate a contributions holiday at intervals of less than three

months apart unless your employer agrees otherwise. Employers are not

required to contribute during a contributions holiday.

Switching Investment Direction

You can amend your Investment Direction in regard to which Investment

Funds you would like to invest your contributions, without charge once

during a calendar month in respect to future contributions to the Scheme

or contributions already invested. To make a switch, please contact the

Manager using the details set out under the heading “Who do I contact with

inquiries about my investment?” on page 31. A fee of $60 will be charged

where a member amends their Investment Direction more than once during

a calendar month as referred to under the heading “What are the Charges?”

on pages 17-18. This fee may be indexed to the CPI each year.

You can elect to implement the Life Phases option by contacting the

Manager using the details set out in the heading “Who do I contact with

enquiries about my investment?” on page 31.

Trust Deed

The Trustee and Manager may amend the Trust Deed by deed at any

time, subject to the requirements of and to the extent permitted in the

KiwiSaver Act. Any variation may have retrospective effect. Where an

amendment will adversely affect a member, that member’s consent will

be required before the amendment can be made.

Investment Funds

The Manager may, with prior written notice to the Trustee (as soon

as practicable prior to doing so and including an explanation with

its reasons for doing so) close, wind up, or amalgamate two or more

Investment Funds on such terms and conditions as determined by

the Manager.

If an Investment Fund is closed, no further contributions may be

invested in that Investment Fund unless and until the Manager has in

its complete discretion determined to reopen the Investment Fund.

As soon as reasonably practicable after the Manager has resolved to

close the Investment Fund, the Manager will send notice of that fact to

each member who has invested in that Investment Fund. Closure of an

Investment Fund shall not affect the obligations of the Manager to pay

benefits to members if they are eligible to receive a benefit.

The Manager may temporarily close the Capital Guaranteed Kiwi Fund1

to new members or to transfers from other Investment Fund at any time

if the Manager believes there is a significant risk that the Unit Price

guarantee will be required.

Where the Manager resolves to wind up an Investment Fund, if a

member’s Investment Direction incorporates the Investment Fund

being wound up, the member’s Investment Direction will be deemed

to no longer incorporate that Investment Fund and the remaining

proportions prescribed in the Investment Direction will be adjusted in

such manner as the Manager may, in its complete discretion, determine.

If the Manager resolves to wind up an Investment Fund, as soon as

reasonably practicable after the Manager has wound up the Investment

Fund, the Manager shall send notice of the fact to each member who

has invested in that Investment Fund and also advise each member

about any adjustment made to the member’s Investment Direction as a

result of the Investment Fund being wound up. As soon as reasonably

practicable after the wind up date in respect of a wound up Investment

Fund, but subject to the KiwiSaver Act, the Manager shall direct the

Trustee to retain such amount which the Manager considers necessary

and appropriate to meet all claims, liabilities (including contingent

liabilities) and expenses, which in the Manager’s opinion ought to be

met out of the wound up Investment Fund’s assets. The Manager shall

also direct the Trustee to, after making such deductions, allocate each

1 For details of the guarantees provided by Fidelity Life to the Trustee in respect of the Unit Price of the Units in the Capital Guaranteed Kiwi Fund as at 31 March 2014 or 31 March 2015 (and the Manager’s intentions with regard to a replacement guarantee as at 31 March in each subsequent year), see pages 19-21.


31

member’s interest in the Investment Fund among the other Investment

Fund or Investments Funds selected by each member in the member’s

Investment Direction (as amended as a result of such wind up). If a

member’s Investment Direction does not select any other Investment

Fund the member’s interest in the wound up Investment Fund will be

allocated to the Default Investment Fund (the Balanced Kiwi Fund).

If the Manager has directed the Trustee to amalgamate two or more

Investment Funds, as soon as reasonably practicable after the

amalgamation the Manager shall send notice of that fact to each

member who has invested in the Investment Funds that are affected

by the amalgamation.

Investment policies, objectives and guidelines

From time to time, the Manager may review and revise the investment

objectives and Authorised Investments of the Investment Funds (subject

to giving prior written notice to the Trustee).

Law changes

The KiwiSaver Act and other legislation may be amended from time

to time by the Government and any such amendment may impact on

the Scheme.

The Trust Deed is deemed to include certain provisions, including among

others a requirement that the Trustee exercise reasonable diligence in

ascertaining whether or not any breach of the terms of the Trust Deed

or of the terms of the offer of interests in the Scheme has occurred, and

to do all things that it is empowered to do to cause any such breach to

be remedied (except if it is satisfied that the breach will not materially

prejudice the interests of the holders of interests in the Scheme).

Grosvenor is also the manager of the Grosvenor KiwiSaver Scheme.

Grosvenor therefore intends to explore the possibility of merging the

Grosvenor KiwiSaver Scheme and the Fidelity KiwiSaver Scheme by the

transfer of members from one of those schemes to the other, subject to

appropriate regulatory approvals and other necessary steps to achieve

this. No time frame has been set for undertaking such a merger.

8. How do I cash in my investment?

The main circumstances in which benefits will be payable under the

Scheme are described above under “What returns will I get?”

on pages 19-25.

Benefits are payable on the end payment date, death, significant

financial hardship, for the purpose of purchasing a first home, in

the event of serious illness or permanent emigration. Access to your

Member’s Accumulation in the Scheme is also permitted where required

under other legislation.

The Manager may redeem units that you hold in Investment Funds to

meet all fees, taxes and costs payable by you.

You are not permitted to sell, assign, mortgage, charge or pass to any

other person your Member’s Accumulation in the Scheme in any way.

Wind up of Scheme

The Scheme shall be wound up if:

the Manager resolves that it be wound up;

the Scheme is required to be wound up by law or Court order; or

by order of the Financial Markets Authority.

If the Scheme is wound up your Member’s Accumulation in the Scheme

that is left after costs, debts and any benefits due are paid will be

transferred to another KiwiSaver scheme of your choice, or, if you fail

to make a choice, transferred to Inland Revenue to be allocated to a

Default Provider of a KiwiSaver scheme.

Transferring to another KiwiSaver scheme

You may apply to join another KiwiSaver scheme in which case the

Manager shall transfer an amount equal to the value of your Member’s

Accumulation in the Scheme (net of any tax) to the other KiwiSaver

scheme upon receipt of written acceptance of terms from the transferee

scheme trustees.

On transferring, you will cease to be a member of the Scheme.

Termination of membership

You will cease to be a member of the Scheme if:

at any time the value of your Member’s Accumulation in the Scheme

is nil or negative;

you have received payment of the total value of your Member’s

Accumulation in the Scheme;

you have received all benefits you are entitled to receive or your

benefit has been transferred to a foreign superannuation scheme

following permanent emigration; or

you transfer to another KiwiSaver scheme.

9. Who do I contact with inquiries about my investment?

You can direct questions in writing to:




Wellington

PO Box 11 872

Wellington 6142

Telephone 0800 336 338


10. Is there anyone to whom I can complain if I have problems with the investment?

Complaints about the Scheme should be made in writing to: Grosvenor Investment Management Limited



Wellington

PO Box 11 872

Wellington 6142


The Manager is a member of Financial Dispute Resolution, an

independent dispute resolution scheme that can be used when a

dispute is unable to be resolved. Complaints about the Scheme can

be made to Financial Dispute Resolution within certain conditions.

Financial Dispute Resolution can be contacted at:

Financial Dispute Resolution

Level 9, 109 Featherston Street

Wellington

Freepost 231075

PO Box 5730

Wellington 6145


You can also contact the Trustee who can consider complaints about

the Scheme at:

Public Trust

Level 5, 40-42 Queens Drive

Lower Hutt

PO Box 31543

Lower Hutt 5040

Telephone (04) 978 4497

The Trustee’s dispute resolution provider under the Financial Service

Providers (Registration and Dispute Resolution) Act 2008 is the

Insurance and Savings Ombudsman, which can be contacted at:

The Insurance and Savings Ombudsman

Level 11, Classic House, 15-17 Murphy Street

Wellington

PO Box 10 845

Wellington 6143


The Financial Markets Authority can consider complaints about the

Scheme and can be contacted at:

Financial Markets Authority

Level 2, 1 Grey Street

Wellington

PO Box 1179

Wellington 6140

Telephone (04) 472 9830

11. What other information can I obtain about this investment?

Trust Deed, Prospectus and Financial StatementsOther information about the Scheme and the securities is contained

or referred to in the Trust Deed, registered prospectus and financial

statements for the Scheme.

You can request a copy of the Trust Deed, the registered prospectus,

the most recent financial statements of the Scheme and the annual

report of the Scheme from the Manager during normal business hours,

free of charge. These documents, along with the most recent financial

statements of the Manager and any material contracts set out in the

registered prospectus, except for the annual report, are filed with the

Ministry of Business, Innovation and Employment and are available

for public inspection online on the Companies Office website at

http://www.business.govt.nz/companies

Annual Information

The Manager will send you each year:

the annual report of the Scheme; and

a transaction summary.

In addition, you can receive regular information on your account via

the web or annually in hard copy.

KiwiSaver Periodic DisclosureThe quarterly and annual disclosure statements issued under the

KiwiSaver (Periodic Disclosure) Regulations 2013 can be obtained free

of charge by calling the Manager on 0800 336 338 on a business day

between the hours of 8.00am and 5.00pm. Copies of these disclosure

statements are also available at www.nzkiwisaver.co.nz

On-request informationYou can request the following documents or information from the

Manager free of charge (see under the heading “Who do I contact with

inquiries about my investment?” on page 31 for contact details):

a copy of the Scheme’s Trust Deed;

the current value of your Member’s Accumulation in the Scheme;

the prospectus for the Scheme;

a copy of financial statements for the Scheme and any

auditor’s report;

the most recent annual report of the Scheme; and

a copy of the most recent Investment Statement.

1 YOUR DETAILS

To speed up the processing of your application, please clearly write only one letter or digit per box.

Title Mr Mrs Ms Miss Dr Other

Surname

First names

Date of birth Gender Male Female

IRD number

Prescribed Investor Rate 10.5% 17.5% 28%

As outlined on pages 21-22 of the Investment Statement, your prescribed investor rate (PIR) is the rate of tax we will apply to your investment. If you do not choose a rate, the 28% rate will apply.

Email

Residential address

Postal address (if different from above)

Telephone numbersHome Work Mobile

IF YOU ARE AN EMPLOYEE please fill in Sections 2, 3, 4 and 5 overleaf

IF YOU ARE CONTRIBUTING DIRECTLY and you are not an employee, please fill in Sections 3, 4 and 5 overleaf

Postcode

Postcode

Please return the application form (and other forms if required) to: Grosvenor Investment Management Limited, PO Box 11 872, Wellington 6142

Fidelity KiwiSaver Scheme Application Form

Complete adviser details overleaf

Version: 31 March 2014

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Primary Employer

Name

Employer IRD number Telephone number

Postal address

Payroll contact person

Indicate your Contribution rate here: 3% or 4% or 8%

Second Employer (if applicable)

Name

Employer IRD number Telephone number

Postal address

Payroll contact person

Indicate your Contribution rate here: 3% or 4% or 8%

2 EMPLOYER DETAILS (If you are an employee)

Postcode

Postcode

Do you wish to select the Life Phases investment option? (Life Phases automatically rebalances your portfolio depending on your age – see pages 9-10

of the Investment Statement for more information about Life Phases.) Yes No

If you haven’t selected Life Phases, please give the percentage of your contribution to be invested in each Fund (maximum four Funds).

Capital Guaranteed Kiwi Fund % Growth Kiwi Fund %

Conservative Kiwi Fund % Asset Class Growth Kiwi Fund %

Asset Class Conservative Kiwi Fund % Aggressive Kiwi Fund %

Balanced Kiwi Fund % Options Kiwi Fund %

Ethical Kiwi Fund %

3 INVESTMENT FUND OPTIONS (All investors)



Please show the percentages in whole numbers and ensure they add up to 100%. We recommend you discuss these with your adviser.

4 TRANSFERS (If you are transferring from another KiwiSaver scheme)

Tick here if you are transferring from another KiwiSaver scheme (we will arrange to transfer the proceeds from your current scheme to the Fidelity

KiwiSaver Scheme).

Please note that if this application is for a person under 16 years of age and only one person or guardian is available to sign the application form, then please

provide proof that the member already holds a KiwiSaver scheme account. We will not be able to process this application form if only one parent or guardian

is available to sign the application form and this proof has not been provided.


5 DECLARATION (All investors)

I declare that the above information is correct. The information and any information collected in the future can be used for statistical purposes as long as I am not identified, and for providing me with information about Grosvenor and its services. I have rights of access to, and correction of, the information held subject to the provisions of the Privacy Act 1993 and amending legislation.

I declare that I have received a copy of the Investment Statement, agree to be bound by the terms of the Trust Deed governing the Fidelity KiwiSaver Scheme, and apply for membership of the Fidelity KiwiSaver Scheme.

I consent to Grosvenor providing information about my investments and my membership to either the adviser shown in this application form or to any other adviser allocated to service my business.

I agree that information held about me may be disclosed outside of the Grosvenor group of companies to the Trustee of the Fidelity KiwiSaver Scheme, Inland Revenue, to other companies for processing on the Manager’s behalf or where required by law, or to other parties with my consent.

I am normally present in New Zealand or I am an employee of the State services. I am a New Zealand citizen or I am entitled to be in New Zealand indefinitely. I direct the Manager to invest contributions received by the Scheme, on my behalf, in the manner specified under section 3 of this application form. I acknowledge that the direction I choose to invest contributions is my responsibility, and neither the Manager nor the Trustee is to be regarded as representing or

implying that my investment choice is appropriate for my personal circumstances. I will seek my own professional financial advice in this respect. I understand that if I have selected the Life Phases as my Investment Direction that my Investment Funds will be automatically rebalanced as specified on pages

9-10 of the Investment Statement and that the Manager has the right to amend with prior notice both the age ranges and the fund allocations from time to time. I understand that choosing my Investment Direction is my sole responsibility and neither the Manager nor the Trustee has represented or implied that any

investment option (including Life Phases) is appropriate for my individual circumstances. I understand that the Fidelity KiwiSaver Scheme is for long-term investment and the value of my investment may rise and fall from time to time. I acknowledge and understand if I invest in the Options Kiwi Fund at any time, that it is a high risk investment which uses gearing and derivatives (options

contracts) that could enhance any returns or generate substantial losses. I understand that deductions of contributions will be made from each payment of my salary or wages (currently at the rate of 3%, 4% or 8%), as applicable if I am

an employee. Apart from the circumstances outlined in the attached Investment Statement, I understand that I will not have access to, or be able to withdraw from, my

contributions/investment in the Fidelity KiwiSaver Scheme until I reach the age of entitlement to New Zealand Superannuation (currently 65) or have been a member of a KiwiSaver scheme (or complying superannuation fund) for five years, whichever is the later.

If I am a member of another KiwiSaver scheme, I understand and consent to the transfer of my interest in the other KiwiSaver scheme to the Fidelity KiwiSaver Scheme. I also understand that I will cease to be a member of the other KiwiSaver scheme. If I have a mortgage diversion facility in place I understand that this facility will cease upon transfer to the Fidelity KiwiSaver Scheme.

If I have provided my email address in this application form, or if I provide it at any stage in the future, I consent to receive emails from Grosvenor and related companies, in respect of the Fidelity KiwiSaver Scheme and any further services.

I undertake to keep my Fidelity KiwiSaver Scheme member account password safe and to disclose it to no one. I acknowledge that neither the Manager nor Trustee are liable for any loss following unauthorised access to my account where I have directly or inadvertently disclosed my password to another person.

I agree that if any of my funds are or will be from a UK pension transfer, I will be bound by the terms imposed now or in the future by the Manager of the Fidelity KiwiSaver Scheme to ensure that QROPS status can be maintained. I provide permission to the Scheme to provide any information about me to Her Majesty’s Revenue & Customs (HMRC) at any stage as required by HMRC, this may include but is not limited to personal, withdrawal and transfer information.

I acknowledge and understand that Fidelity Life does not guarantee the Unit Value of the Capital Guaranteed Kiwi Fund on any date other than on 31 March 2014 and 31 March 2015.

Signature of Applicant (if aged 16 or over): Date

Signature of Legal Guardian (if applicable): Date

Full name of Legal Guardian (if applicable):

Capacity of Legal Guardian (if not parent):

Signature of second Legal Guardian (if applicable): Date

Full name of second Legal Guardian (if applicable):

Capacity of second Legal Guardian (if not parent):


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6 IDENTIFICATION STATEMENT (All applicants) Version: 31 March 2014

ALL APPLICANTS (aged over 16)

1. Proof of identity (name and date of birth)

Option 1 Option 2 Option 3

Type of ID ID No.

Type of ID ID No.

AND2. Proof of residential address

Type of document

This form must be completed and accompany the application form in all cases.

Grosvenor is subject to the new Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act). The Act contains higher standards of

customer identification and verification for all new customers from 30 June 2013 which means we are required to collect more information from you.

For a list of valid identification types, see the Guide to Verification and Certification of Identity Documents attached to this application.

PARENT/GUARDIAN TO COMPLETE1. Proof of identity of Parent/Guardian (name and date of birth)

Parent/Guardian 1

Type of ID ID No.

Type of ID ID No.

Parent/Guardian 2

Type of ID ID No.

Type of ID ID No.

AND

2. Proof of residential addressIf parent(s)/guardian(s) live at different addresses please provide separate proof of residential address documents for each parent/guardian.

Parent/Guardian 1

Type of document

Parent/Guardian 2

Type of document

3. Proof of Guardianship

Child’s full name

Type of ID ID No.

Please complete over page

Complete the section below if you are a parent or guardian enrolling on behalf of a child aged 18 or younger.

Adviser company/

Brokerage name:

Adviser name:

Adviser No:

7 ADVISER DETAILS

Please return the application form (and other forms if required) to:

Grosvenor Investment Management Limited PO Box 11 872, Wellington 6142

DECLARATION (All investors aged over 16)

I acknowledge that I have received and read the Fidelity KiwiSaver Scheme Investment Statement.

Signature of applicant Date Day Month Year

I acknowledge that I have received and read the Fidelity KiwiSaver Scheme Investment Statement (if enrolling a child on child’s behalf).

Signature of member or Parent/Guardian 1 enrolling on behalf of a child Date Day Month Year

Signature of member or Parent/Guardian 2 enrolling on behalf of a child Date Day Month Year

Adviser (if applicable)

I declare that I have sighted the originals of the identification in respect of the applicant.

Signature of Adviser/Broker Date Day Month Year

Notes:

Name changes – If your name has changed, you will also need to provide proof of any name change. For example, a verified photocopy of a Deed Poll

or Marriage/Civil Union Certificate.

Cheque deposits – Please be advised that where a cheque is received, it will not be banked until the application has been accepted.

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Investment Fund Administration fee*

Guide to Verification and Certification of Identity Documents

Proof of identity

Option 1

• One form of the following primary photographic

identification

– New Zealand passport (including the signature page)

– New Zealand firearms licence

– Passport issued by a foreign government (including the

name, date of birth, photograph, New Zealand visa and

signature of the person)

Option 2

• One form of the following primary non photographic

identification

– New Zealand full birth certificate

– Certificate of New Zealand citizenship issued under the

Citizenship Act 1977

– Birth certificate issued by a foreign government, the

United Nations or an agency of the United Nations

• Plus one form of the following secondary or supporting form of

photographic identification

– New Zealand driver licence

– 18+ Card

– Valid International driving permit

Option 3

– New Zealand driver licence

• Plus one of the following

– Credit, debit or eftpos card, that contains the person’s name

– A bank statement issued to the person that is not more than

3 months old issued by a registered bank

– Super Gold Card

– A statement from a government department issued to

the person that is not more than 3 months old

Plus – Proof of residential address

• A certified copy of a

– bank statement

– Utility bill

– Rates bill

– Statement from a government department issued to

the person that is not more than 3 months old

Certification of Identity Documents

All copies of identification must be certified by an authorised

agent of Grosvenor or an “AML Trusted Referee”. Certified copies

must be legible and all photos must be clear. Certification is valid

for three months.

The certifier must view the original document and compare it

with the copy. The certifier can then sign and date the copy

and print their name, occupation and a statement as follows:

“I certify that this is a true copy of the original document

sighted by me today and represents the identity of the

named individual”.

Persons able to certify identification documents

• Authorised agent of Grosvenor

• Lawyer

• Justice of the Peace

• Notary Public

• Chartered Accountant

• Registered medical doctor

• Registered teacher

• Kaumatua

• Member of Parliament

• Police Constable

• A NZ Honorary Consul

• Minister of Religion

ScenarioNew to KiwiSaver or transferto Fidelity KiwiSaver Scheme

New to KiwiSaver

Transfer toFidelity KiwiSaverScheme

New to KiwiSaver

Transfer to Fidelity KiwiSaver Scheme

Signature required Applicant onlyApplicant and one parent/legal guardian

Applicant or one parent/legal guardian

Both parentsand/or all legalguardians

One parent/legal guardian

ID requiredCertified copy of Option 1, 2or 3

Applicant (minor): A certified copy of Birth CertificateFor all parents or legal guardians that have signed the application form: Certified copy of Option 1, 2 or 3

Proof of residential address

A certified copy of bankstatement, utility bill, ratesbill or statement from agovernment departmentno more than 3 months oldshowing the address of theapplicant

A certified copy of bank statement, utility bill, rates bill or statement from a governmentdepartment no more than 3 months old showing the address of each parent or legalguardian

In case of minors, parents/ legal guardian’s proof of address is acceptable

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Member Adults 18 or over Minors 16 and 17 Minors 16 and 17 Minors under 16 Minors under 16

Fidelity KiwiSaver Scheme Direct Debit AuthorityPlease note that only cheque accounts and certain types of savings accounts are available for direct debit.If you are unsure about your account, please check with your bank.

AUTHORISATION CODE

0 6 1 9 3 2 9

AUTHORITY TO ACCEPT DIRECT DEBITS(not to operate

as an assignment or agreement)

Instructions to Grosvenor New Amended

Member number IRD number

Member name

Amount to pay $

Start date for direct debits: End date for direct debits (if applicable):

To be debited fortnightly monthly annually (only select one)

I have attached a bank coded deposit slip. (Required)

Yes No I also wish to make contributions from this bank account for other Fidelity KiwiSaver

Scheme members. (Enter their details over the page).

Address of bank account holder (for correspondence regarding this direct debit)

Name (of Bank Account)

Bank account from which payments to be made:

Bank Branch Account number Suffix

To: The Bank Manager (Please print clearly)

Bank

Branch

Town/City

I/We authorise you until further notice in writing to debit my/our account with all amounts which Grosvenor Investment Management Limited (hereinafter

referred to as the Initiator) the registered Initiator of the above Authorisation Code, may initiate by Direct Debit.

I/We acknowledge and accept that the bank accepts this Authority only upon the conditions listed below.

Information to appear on my/our bank statement (to be completed by the Initiator – Grosvenor Investment Management Limited)

Payer particulars Payer code Payer reference

Your signature(s):

Date: Day Month Year

See conditions of this authority overleaf

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F I R S T N A M E M E M B E R N O K I W I S A V E R

For bank use only

Bank stampChecked byRecorded byDate receivedApproved

08 2007

1932

03 2014

1932

1. The Initiator:(a) undertakes to give notice to the Acceptor of the commencement date, frequency

and amount at least 10 calendar days before the first Direct Debit is drawn (but not more than 2 calendar months). This notice will be provided in writing (including by electronic means and SMS where the Customer has provided prior written consent (including by electronic means including SMS) to communicate electronically).

Where the Direct Debit system is used for the collection of payments which are regular as to frequency, but variable as to amounts, the Initiator undertakes to provide the Acceptor with a schedule detailing each payment amount and each payment date.

In the event of any subsequent change to the frequency or amount of the Direct Debits, the Initiator has agreed to give advance notice at least 30 days before the change comes into effect. This notice must be provided in writing (including by electronic means and SMS where the Customer has provided prior written consent (including by electronic means including SMS) to communicate electronically.

(b) may, upon the relationship which gave rise to this Authority being terminated, give notice to the Bank that no further Direct Debits are to be initiated under the Authority. Upon receipt of such notice the Bank may terminate this Authority as to future payments by notice in writing to me/us.

(c) may, upon receiving an ‘authority transfer form’ (dated after the day of this authority) signed by me/us and addressed to a bank to which I/we have transferred my/our bank account, initiate Direct Debits in reliance of that transfer form and this Authority for the account identified in the authority transfer form.

2. The Customer may:(a) at any time, terminate this Authority as to future payments by giving written

notice of termination to the Bank and to the Initiator.(b) stop payment of any Direct Debit to be initiated under this Authority by the

Initiator by giving written notice to the Bank prior to the Direct Debit being paid by the bank.

(c) where a variation to the amount agreed between the Initiator and the Customer from time to time to be Direct Debited has been made without notice being given in terms of clause 1(a) above, request the Bank to reverse or alter any such Direct Debit initiated by the Initiator by debiting the amount of the reversal or alteration of a Direct Debit back to the Initiator through the Initiator’s Bank. PROVIDED such request is made not more than 120 days from the date when the Direct Debit was debited to my/our account.

Conditions of this authority 3. The Customer acknowledges that:(a) this Authority will remain in full force and effect in respect of all Direct Debits

passed to my/our account in good faith notwithstanding my/our death, bankruptcy or other revocation of this Authority until actual notice of such event is received by the Bank.

(b) in any event this Authority is subject to any arrangement now or hereafter existing between me/us and the Bank in relation to my/our account.

(c) any dispute as to the correctness or validity of any amount debited to my/our account shall not be the concern of the Bank except in so far as the Direct Debit has not been paid in accordance with this Authority. Any other disputes lie between me/us and the Initiator.

(d) where the Bank has used reasonable care and skill in acting in accordance with this authority, the Bank accepts no responsibility or liability in respect of:

– the accuracy of information about Direct Debits on Bank statements. – any variations between notices given by the Initiator and the amounts of

Direct Debits; and(e) the Bank is not responsible for, or under any liability in respect of the Initiators

failure to give notice in accordance with 1(a) nor for the non-receipt or late receipt of notice by me/us for any reason whatsoever. In any such situation the dispute lies between me/us and the Initiator.

(f) notice given by the Initiator in terms of clause 1(a) to the debtor responsible for the payment shall be effective. Any communication necessary because the debtor responsible for payment is a person other than me/us is a matter between me/us and the debtor concerned.

4. The Bank may:(a) in its absolute discretion conclusively determine the order of priority of

payment by it of any monies pursuant to this or any other authority, cheque or draft properly executed by me/us and given to or drawn on the Bank.

(b) at any time terminate this Authority as to future payments by notice in writing to me/us.

(c) charge its current fees for this service in force from time to time.(d) upon receipt of an ‘authority to transfer form’ signed by me/us from a bank

to which my/our account has been transferred, transfer to that bank this Authority to Accept Direct Debits.

DEDUCTION DETAILS FOR ADDITIONAL FIDELITY KIWISAVER SCHEME MEMBERS


Member name

Amount to pay $

Select the frequency fortnightly monthly annually (only select one)

Start date End date (if applicable)


Member name

Amount to pay $




Member name

Amount to pay $




Member name

Amount to pay $



UK Pension Transfer Service – Provisions Declaration

This Declaration must be completed if you are making a UK Pension Transfer

I, (full name)

of (address)

acknowledge and accept that:

1. I will be bound by the terms imposed now or in the future by the Fidelity KiwiSaver Scheme to ensure that QROPS status can be maintained.

2. I provide permission to the Scheme to provide information about me to the HMRC at any stage as required by HMRC, including personal

information and withdrawal and/or transfer information.

3. I will forfeit all protection associated with any Protected Rights funds that are transferred.

4. The Scheme is required to advise HMRC of my name, address and national insurance number, and the date, amount and nature of any payment

should I make a withdrawal or transfer until the later than:

I provide the Scheme with a declaration that I have been a non-UK tax resident in the current UK tax year and the previous five UK tax years

(provision of such a declaration to the Scheme will not remove any of my liability to HMRC for any taxes or charges due); and

the payment is made ten years or more after the day of my transfer into the Scheme.

5. I will only be able to transfer to another QROPS scheme.

6. I will have to pay an unauthorised payment charge to HMRC if I make any unauthorised withdrawals.

7. I have had the opportunity to consult with financial and tax advisers in New Zealand and in the UK. If I have chosen not to consult with such

advisers, I acknowledge that there could be adverse financial and tax consequences for which I accept sole responsibility. Grosvenor and the

Scheme has not provided me with tax advice and I understand that Grosvenor, the Trustee and the Scheme takes no responsibility for the tax

consequences of any action I may take in regard to this UK pension transfer.

Member’s signature: Date:

Name of witness:

Signature of witness:

Date:

Occupation of witness:

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31 March 2014

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Grosvenor Investment Management Limited Level 5, Alcatel-Lucent Building, 13-27 Manners Street

PO Box 11 872, Wellington 6142

or phone 0800 336 338

or email [email protected]